Exmark Propane Presentation - HEADING John Cloutier - Senior Marketing Manager Garry Busboom - Chief Development Engineer

Exmark Propane Presentation

                 HEADING

 John Cloutier – Senior Marketing Manager
 Garry Busboom – Chief Development Engineer

A SUSTAINABLE FUEL SUPPLY

 For professional
 landscapers, sustainability
 will only be readily
 embraced when there exists
 a combination of
 environmental friendliness
 and cost effectiveness

EXMARK HAS ASKED
WHY PROPANE? WHY NOW?

  In the past Green alternatives such as propane
   have always come at a cost for landscape
   organizations in three key areas
      1. Up-front Equipment Purchase Cost Premium versus
         Return on Investment/Payback cycle was too long
      2. Propane Equipment resulted in reduced performance and
         reliability versus existing gas options
      3. Move to propane power is transformational for the
         landscape organization and must go beyond riding
         products. Most OEM’s have stopped short of meeting the
         needs of the landscape professional.

       Now The Game Has Changed!

EXMARK HAS ASKED
WHY PROPANE? WHY NOW?

  OEM designed and engineered Propane/EFI engine
   options from Kohler significantly enhances
   performance and greatly reduces fuel costs versus
   past conversion approaches in the marketplace

  Price differential between propane and gas is more
   compelling today than in years past

  Packaged on industry leading Exmark riding and
   walk-behind mowing products. The first truly OEM
   mowing line-up!

  More clients are demanding green equipment on their
   properties than ever

WHY PROPANE + CLOSED-LOOP EFI?

 Same proven benefits of Kohler’s gasoline Closed-Loop EFI system …
    Increased fuel efficiency = reduced fuel consumption =
         Lower fuel costs $$$
         Less fuel burned = Less exhaust emissions =
              o Less green house gas (GHG) emissions yields a lower carbon footprint
 Propane …
    Lower fuel costs $$$ … propane cost per BTU, in most cases, is significantly less than
     gasoline or diesel
    Propane is considered a GREEN Alternative Fuel
    Propane produces less harmful emissions compared to gasoline or diesel
         Less green house gas (GHG) emissions = Lower carbon footprint
         In many locations, propane mowers can be used during ozone action days when
          others are restricted from operation
    FUEL STABILITY … no deterioration or breakdown of fuel over time
    FUEL PILFERAGE … virtually eliminated

  Combining the clean burning benefits and economics of propane with Kohler’s
    Closed Loop EFI system yields the most fuel efficient, cost effective and
              environmental friendly engine option available today.

WHY PROPANE CLOSED-LOOP EFI?

 Kohler Engines are CARB and EPA certified
 Improved Reliability & Dependability as compared to conventional carbureted
  systems
 Same proven technology as the Kohler gasoline EFI system
   All major EFI system components are the same except the fuel module, injectors
    and wiring harness
   Automatic optimization for fuel quality, altitude and ambient air conditions
   Diagnostic software – provides easy diagnosis so you can quickly detect and fix
    problems if they occur.
 Best-In-Class Startability
   Fuel lock-off is controlled by the ECU
   Fuel lock-off is turned “on” automatically by the ECU when the key switch is
    turned “on” to prime the fuel system
   Works and starts like your car – No Choke
 No after-bang as compared to conventional carbureted systems
 No carburetor = no carburetor problems
 Consistent performance for the life of the engine … no adjustments required
 Exclusive 3 year, unlimited hour commercial engine warranty.

PROPANE VAPOR DRAW TANKS … OPPORTUNITIES

  Tanks are unique … all tanks are a "vapor draw"
   design and include a special baffle system to prevent
   liquid propane from entering the supply line which can
   render the unit inoperative and cause damage to fuel
   system components
  In order to prevent the use of standard "liquid draw"
   tanks, such as those typically used on fork trucks, all
   “vapor draw” tanks incorporate a service valve with
   LH threads
  Opportunities …
    Service valve coupling with LH threads is required
        Not available at many filling stations and is required for
         proper purging of LP-Gas containers per NPGA #133-
         89(a) procedure
        Many filling stations use the service valve to fill the
         tank instead of the universal fill valve

PROPANE TECHNICAL FACTS

 Propane weighs 4.22 pounds per gallon
     20# tank contains 4.7 gallons propane
     33 ½# tank contains 7.9 gallons propane
     43 ½# tank contains 10.3 gallons propane

 One gallon of propane contains 73% of the energy
  contained in one gallon of gasoline.
     It takes 1.36 gallons of propane to equal the
      energy content of one gallon of gasoline.

PROPANE TECHNICAL FACTS

  Carbon Footprint
    PERC (Propane Education & Research Council) reports
     that CO2 emission reductions range typically in the 20% -
     25% range
  CO2 Emissions
    Gasoline … Total of 25.24 pounds of CO2 per gallon
     (including upstream emissions)
    Propane … Total of 15.23 pounds of CO2 per gallon
     (including upstream emissions)
  For additional information … go to the Exmark.com home
   page, click on “Eco-Friendly Mowers”, then click on “Propane
   Powered Equipment”

MARKET POSITIONING

MARKET POSITIONING

                     Includes riders and walks

CHANNEL ENGAGEMENT

  There are no short-cuts, each partner in the chain
  including Dealers and Distributors must be
     Trained on the advantages of the new EFI powered line-up
     Trained on the services aspects that are unique to propane equipment
     Trained to answer the many questions and myths associated with a move to
      propane
     Educated on opportunities with a higher probability of adoption such as non-
      attainment areas
     Driven to form relationships with local propane marketers
     Presented with program opportunities such as the Demo program and End
      User Incentive Program provided by PERC

    A Significant Percentage of OPE Dealers Will Not Engage Until
               Customer Demand Forces Them to Do So!
                   Green Must Equal Sales and Profits!

CHANNEL ENGAGEMENT

  Are we making progress?
    PERC Demonstration Program and End User Incentives are getting
     Dealers to ask questions. PERC needs to continue strong promotion
     here.
    Exmark and Distributor Field Sales organizations are more educated
     and engaged than ever.
    100+ Dealers attended propane webinars hosted by Exmark/PERC
     and Kohler.
    Exmark Propane Marketing Resource Guide distributed to
     approximately 500 Dealers.
    Upcoming Dealer service schools have specifically incorporated
     propane/EFI training.
    Channel Partners are engaging propane marketers but success may
     depend on propane marketers initiating and cultivating these
     relationships.
    PERC has to be the primary source of information including training
     materials for our channel – They have made tremendous progress!

TOP 10 FAQS

Does the manufacturer warranty remain intact on a propane
field conversion?
  In regards to the Exmark portion of the unit, Exmark will not warrant any failure or
  issue that is deemed to be caused by the propane conversion.
  Most importantly, see the below warning that is published in our Operator’s
  manuals:
    “Removal or modification of original equipment, parts and/or accessories may
    alter the warranty, controllability, and safety of the machine. Unauthorized
    modifications to the original equipment or failure to use original Exmark parts
    could lead to serious injury or death. Unauthorized changes to the machine,
    engine, fuel or venting system, may violate applicable safety standards such as:
    ANSI, OSHA and NFPA and/or government regulations such as EPA and
    CARB.”

I have been told by Kohler that conversion on Kohler engines
does void warranty. Is this correct?
  Regarding Kohler engines that have been converted to propane, Kohler will not
  warrant any engine failure or issue that is deemed to be caused by the propane
  conversion.

TOP
TOP     10 FAQS
    10 FAQS

  Do dealers need to be "state" certified to repair propane
  powered units?
    At present each state must follow the National Fire Protection Agency (NFPA) 58
    code for handling of liquefied petroleum gas (LP or propane) and NFPA 30-A code
    for motor fuel dispensing facilities and repair garages.
    Additionally, states may enforce additional regulations or requirements for the
    handling of gaseous fuels, such as propane. It is suggested that you check with the
    Propane Gas Association in your state. A list of contacts for each state association
    can be found at http://www.npga.org/i4a/pages/index.cfm?pageid=544.
    Finally, engine manufacturers and propane conversion kit manufacturers may have
    their own forms of required training and certification. Please check with the
    manufacturer of the engine or conversion kit for specifics.

  Can we get a list of suppliers willing to work with dealers in our
  AOR?
    To identify propane suppliers in your area please visit http://www.autogasusa.org
    and click the “Find A Propane Retailer” tab in the top right hand corner of the
    page. Simply enter your zip code and identify the type of services you’re seeking
    and you’ll be shown a list of propane suppliers in your area. You can choose to
    contact them via email, phone, or have them contact you through this service.

TOP 10 FAQS

Does the IRS still allow an alternative fuel credit on propane
usage?
  The Alternative Fuel Tax Credit passed as part of the Fiscal Cliff Legislation only
  applies to alternative fuels, such as propane, used in on-road applications and
  forklifts at this time. The tax credit is $0.50/gallon of odorized propane when used
  in an on-road or forklift motor fuel application. The tax credit does apply to
  alternative fuel infrastructure costs as well, but is limited to 30% or $30,000 of the
  total cost, whichever comes first. (Note: Please consult your tax attorney or
  professional for further clarification before filing!)

Is there a reduction in horsepower with the EFI/propane vs.
gasoline powered units?
  Engines fueled by gaseous propane typically do not produce as much hp as a
  gasoline fueled engine of equivalent configuration. A general rule of thumb is that a
  carbureted propane engine will produce 10% less hp than an equivalent carbureted
  gasoline engine. A propane EFI system however, is able to substantially reduce
  this loss of hp.

TOP 10 FAQS

What initial investment can we expect to service propane
customers, including software and specialty tools?
  Regarding the servicing of the Propane EFI engines, no specialty tools are
  required. Kohler will offer a Propane upgrade to the EFI Diagnostic Software that
  is currently used by technicians working with our gasoline EFI engines. The
  diagnostic software allows individuals to troubleshoot any issue that may occur by
  using SAE fault codes and will allow users to download run-time data.

What additional training is required to properly service and
maintain these propane units? Are training courses provided
or made available?
  Kohler is in the process of adding Propane EFI to their service update schools.
  Kohler is also finalizing the development of the Propane EFI upgrade to the EFI
  Diagnostic Software that will allow users to troubleshoot any issue that may occur
  by using SAE fault codes and will allow users to download run-time data.

TOP 10 FAQS

When we talk propane, customers always ask about
conversions. Does Exmark have a solution for dealers
regarding conversions?
  Exmark does not currently offer a field conversion kits nor do we have any future
  plans at this time to do so.

Local propane representative promotes end-user cost savings
by performing oil changes 150hrs versus 50hr OEM manuals.
Which is correct during the warranty period?
  We strongly encourage our customers to follow the engine manufacture’s
  recommended oil change interval. Kohler’s recommended oil change interval
  remains unchanged as compared to the gasoline-fueled engines. It is true that
  propane does burn much cleaner than gasoline and therefore produces less
  combustion by-products that contaminate the oil. The cleaner looking oil gives the
  impression that the oil will last longer before an oil change is needed. However,
  this is a misconception as the oil still experiences roughly the same amount of
  “thermal breakdown” due to heat, regardless of fuel and it is not readily visibly
  apparent.

QUESTIONS FROM THE AUDIENCE