1

Who is Guardian?

• #1 Selling Brand of Automatic• #1 Selling Brand of Automatic Standby GeneratorsBy

- Best value/priceE i t i t ll ti- Easiest installation

- Broadest selection- Focus on quality and innovation- Largest network of dealer support- Generators are our only Business!

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Definition of a Standby Generator

• System monitors incoming utility voltage

• When utility power is interrupted, the generator is signaled to start

• The automatic transfer switch then safely closes off the utility line and simultaneously opens the line from the generator

• Within 20 seconds the home standby system begins supplying electricity to the home or building’sg pp y g y gelectrical panel. The system continues to monitor utility line conditions.

• When utility voltage returns at a steady state the systems re-transfers the electrical load back to the utility line and sends a signal to the generator to shut down. The generator is then returned to standby mode, ready for the next power outage.

Installation Basics

• Generator (1) is placed (air- Generator (1) is placed (aircooled on gravel, liquid-cooled and all Florida generators on concrete slab)

• Transfer switch (4) is placednext to load panel (3)

• Conduit is run from switch to outdoor connection box where generator whip is connected

• Gas supply is run to flex fuel line (5) of generator

• Final electrical connections are made which move priority circuits over to transfer switch load panel or a larger amperage transfer switch is used to provide whole house protection

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Air-cooled vs. Liquid-cooled

Air-Cooled (8 to 20 kW)( )• Air-cooled engine similar to mower• Typical application: Selected home circuits

Liquid-Cooled (25 to 150 kW)• Liquid-cooled engine similar to car• Typical application: Whole house or light

commercial application (bank, restaurant, i t t )convenience store, etc.)

NG Consumption• 17 kW – 183 cu.ft./hr @ full load• 25 kW – 375 cu.ft./hr @ full load• 45 kW – 720 cu.ft./hr @ full load

MARKET & FACTORS& FACTORS

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History and Forecast

Exponential Market Growth

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

Source: US-CPSC, SBI-Synovate, Generac Management

$0

$200,000,000

$400,000,000

2002 2003 2004 2005 2006 2007 2008 2009 2010

"Baseline Market" "With Weather Event Upside"

The Home Standby Market has now eclipsed the portable market

Market Potential

eclipsed the portable market.

Home Standby Market• $600 Million• 7 years to achieve• Triple digit growth annual• Average margin = 20-30%

Portable Market• $600 Million• 43 years to achieve• 4-7% growth annual• Average margin = 8-12%

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Increasing Population, New Homes & Small Businesses

300 Million people in the USA i B b B (81M)• Aging Baby Boomers (81M)- security, comfort, convenience,

high disposable income78 Million single family homes• <1% own home standby generators

10% own a portable generator1 6 Million new homes last year

Single Family Home Market Share of Home Standby Installations

1.6 Million new homes last year• Greater power requirements• In-home technology advancements6M+ small business owners• 62% have no back-up power

Increasing HomeownerAwareness and Demand

MEDIA PRICE

MOTHERNATURE

ATTENTIONPRICE

BIG BOXDISTRIBUTION

ADVERTISING INTERNET

INVESTMENTPROTECTION MEGA

TRENDS

KEEPING UPw/ THE JONES

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Increasing Number of Weather Related Events

Number of tropical storms and hurricanesNumber of hurricanes Category 3 or higher

Broad Need for Standby Power

Causes of Major Number of People AffectedCauses of Major Disturbances 2002-2005

16.218.3 18.6

Number of People Affectedby Major Disturbances

(in millions)

2003 2004 2005Source: North American Electric Reliability CouncilIncludes disturbances caused by fire, earthquakes, unit tripping,vandalism and breaker failure.

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• 1M in Seattle – Ice Storm 1/07

Increasing Number of Weather Related Events

• 1.5M in Pacific NW - Windstorm 12/06

• 1.5M Illinois thru Missouri - Ice Storm 11/06

• .5 M in Buffalo, NY - Snowstorm 10/06

• 1M in Los Angeles & San Francisco - Heat Wave 9/06

• 1M in St. Louis due to Heat Wave 8/06

• 6M in Florida due to Hurricane Wilma 10/05

• 10M in New Orleans due to Hurricane Katrina 8/05

• 14M Floridians without Power after ’04 Hurricanes

• 50M Northeasterners without power ’03 Blackouts

• Population densityA f i f

Taxing the Grid

• Age of infrastructure• Mother Nature

“US has the consumption of a superpower, but has the grid of a third world nation”

•- Bill Richardson,Bill Richardson, Former U.S. Energy Secretary

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Thousands of MW% of Avg. Peak Demand

Peak Demand vs. Capacity Trend

14

18

22

400

600

800

Represents Potential Blackouts

101996 1997 1998 1999 2000 2001 2003 2004 2005

200

Reserve Margin Peak DemandSource: North American Electric Reliability Council

Key Factors Contributing to Standby Generator Growth

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Residential Average Price History and Forecast –

Becoming More Affordable

Inflation Adjusted

1997 2000 2003 2006 2009 2012 2015

$ per kW of Average Air-Cooled Home Standby

Age Baby Boomers

Typical Home Standby Customer

Home Size (Sq. Ft.)Age – Baby Boomers

20-39 — 6.0%40-59 — 50.0%60+ — 44.0%

Household Income

Under 2,000 — 31.0%2,000-2,999 — 37.0%3,000-3,999 — 19.0%Over 4,000 — 13.0%

H V lHousehold IncomeUnder $60,000 — 23.0%$60-$100,000 — 33.0%$100-$200,000 — 27.0%Over $200,000 — 17.0%

Home Value Under $200,000 — 29.0%$200-$300,000 — 24.0%$300-$400,000 — 16.0%Over $400,000 — 31.0%

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Sales History

Geographical Sales History UsageUsage is concentrated in areas with high

High Density Sales HistoryUsage is concentrated in areas with high hurricane frequency and poor power grids.

Low Density Sales History

THE GUARDIANDIFFERENCE

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The Guardian Difference:

• Category Dominance• Distribution & Brands• Quality & Innovation• Depth & Breadth of Line• Value Priced Leader• Dealer Network

The Guardian Difference:Category Dominance

• Guardian is the #1 Selling Home Standby Generator

Onan6%

Briggs4%

Other10%

2006 Market Share by Brand: $600M total

• Guardian has 70% Market Share - Larger than all of the competition combined – Proven track record

GUARDIAN70%

Kohler10%

6%

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The Guardian Difference:Sales Channels / Brands

E-Commerce ElectricalWholesaler

Retail

DEALER

PrivateLabel

The Guardian Difference:Quality/Value Price Ranking

IncreasingValue For Price

Generac/Guardian

Honda

CaterpillarBriggs & Stratton

Guardian positioned in the upper right-hand quadrant

Perceived Quality

Source: L.E.K. Interviews, Analysis Study 2006

Coleman Kohler

Cummins

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The Guardian Difference:Quality Exceeding Standards

• 50 years of electromagnetic engineering experience• Vertically integrated and self-sufficient• Vertically integrated and self-sufficient• Non-reliant on outsourcing of major components• First residential line to be• Each unit is tested as it comes off the production line

Japanese Industrial Standardization

The Guardian Difference:Continuous Innovation

• Continuous research and d l t l d tdevelopment leads to innovations that set industry standards

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The Guardian Difference: Engine Technology

• The original OHVI gwith automotive style design changes

• 3x the life of competition at 3000 hours

• 2 years or 200 hours between oil changes.

• 200 hours is 8.3 days without an oil change

The Guardian Difference: Depth of Line

Residential Standby Generators

Light-CommercialStandby Generators Telecommunications

Output: 7kW 7kW -- 45kW45kWEnd Users: HomeownersHomeowners

Output: 20kW 20kW -- 150kW150kWEnd Users: Gas Stations, Gas Stations,

Restaurants and Other Retail Restaurants and Other Retail BusinessesBusinesses

Industrial Standby Generators Portable GeneratorsRecreational Vehicle

Generators

Output: 20kW 20kW -- 3MW3MWEnd Users: Cell Towers and Cell Towers and

Switching CentersSwitching Centers

Industrial Standby Generators

Output: 20kW 20kW -- 6MW6MWEnd Users: Factories, Hospitals, Factories, Hospitals,

Data Centers and Municipal Data Centers and Municipal BuildingsBuildings

Portable Generators

Output: 12.5kW 12.5kW -- 17.5kW17.5kWEnd Users: Homeowners and ContractorsHomeowners and Contractors

Generators

Output: 3.5kW 3.5kW -- 7.5kW7.5kWEnd User: Motor Homes, Travel Motor Homes, Travel Trailer Manufacturers and After Trailer Manufacturers and After

Market SalesMarket Sales

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The Guardian Difference:Breadth of Line

• Comprehensive range 8kW 150kWrange 8kW -150kW

• Air cooled and liquid cooled option

• Variety of transfer switch configurationsswitch configurations

• High speed or low speed rpm options

• Steel or Aluminum enclosure options

The Guardian Difference:Value Priced Leader

• Most affordable backup power- vertically integrated manufacturer- vertically integrated manufacturer- design/build engines and alternators

Kohler B&S Guardian Kohler Guardian12 000W 15 000W 20 000W 30 000W 45 000W

• Lowest cost per kW in the industry (45-80%)• Lowest installation cost in the industry

- pre-wired conduits/transfer switch on air-cooled

12,000W 15,000W 20,000W 30,000W 45,000W$3899 $5199 $5149 $13,499 $10999

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The Guardian Difference:Dealer Network- 4100+ Sales and Servicing Dealers Nationwide

Supported with 800 Dealer locator number- Supported with 800 Dealer locator number

The Guardian Difference: Manufacturing Facilities

T t l S Ft 1 Milli

WhitewaterVertically integrated engine & generator production. Doubled plant size after blackout of 2003. (295,000 sq. ft.) Capacity increased 700%.

Total Sq. Ft. = 1 Million

More than the competition’s facilities combined

WaukeshaCorporate headquarters & water-cooled generator & transfer switches (265,000 sq. ft.)

EagleWater-cooled genset production & metal fabrication(240,000 sq. ft.)

Maquoketa500-2000kW generator production (145,000 sq. ft.)

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The Guardian Difference:Distribution Center

200,000 sq. ft.

State of the art facility

We continue to invest

THE PRODUCT

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Streamlined, stylish design

Air-Cooled Product Enclosure

• Lockable, single-point hood release • Overhang on roof• Articulated, self-holding hinges• Superior corrosion resistance

– Galvaneal base coating g– Hand tooled & stamped – Textured powder coat paint– All weld points moved to the inside

• Removable front panel for service access

EXTERNAL PANEL (10 – 20 kW)

User Friendly Controls

( )• Recessed with hinged, lockable door

• External circuit breaker disconnect

• GFCI outlet for outdoor power needs– Angled receptacle

• LED status display in door – Green: Ready for operationGreen: Ready for operation – Red: Shutdown or fault status – Yellow: Requires attention

(17 & 20 kW only)

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• 2-line, backlit LCD displayBi li l t t (E li h & S i h)

New Digital Controller

• Bi-lingual text (English & Spanish)• Engine hours• Generator ready status• Event logging

– Run logging (50 events)– Alarm logging (50 events)

• Optional wireless remote monitorOptional wireless remote monitor• Maintenance reminders and alerts• Alarm displays (automatic shutdown)• Status checks• Diagnostics (test menu)• User settings

New High Efficiency Alternator

Best In Class Power Quality

• True Power Technology• < 5% total harmonic distortion• Confident operation of sensitive

electronic equipment and appliances

Di i l i h f• Digital isochronous governor for smooth and consistent 60 Hz output (10 - 20 kW)

• 8 kW has mechanical governor (60 Hz + 5%)

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• Specifically designed for long run

Best In Class Power Output

Specifically designed for long run times & rigorous demand of generator use

• No break-in period with 2-year, 200-hour service intervals

• Full pressure lubrication ensures instant total lubrication to vital parts

• High torque design respondsHigh torque design responds instantly to large electrical loads

• Automotive style designs, including spin-on oil filter, extends oil change interval and helps to eliminate oil consumption

Portable Generators

•15 000 Watt & 17 500 Watt units•15,000 Watt & 17,500 Watt units•Manual transfer switch (60a/16 circuits)•Long life, durable, reliable•Generac’s own engine 922 cc OHVI®•Auto idle control•Electric start •Auto voltage regulationg g•Electronic governor

Great for immediate response to events!

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GenReady™ Load Center

GenReady is a hybrid load center panel that operates as a normal load center and also allows for seamless integration of standby generatorscenter and also allows for seamless integration of standby generators.

Remote Wireless Monitoring System

• Status menu• Test menu• History menu• Service schedule

E i• Exercise menu• Time & Date menu• Graph menu

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• 18-circuit SE rated load centerA t ti l d h ddi

200 Amp Transfer Switch

• Automatic load shedding – Sheds entire main panel if connected load

exceeds generator output – Automatic or manual re-connect of shed

loads • Reconnect after 5, 15, 30 or 60 minutes• Try to re-connect one time or continuous• Manual reset at any time

– Addresses 2008 NEC sizing for optional standby

• Hour Meters

Options & Accessories

• Battery Warmer

• Coolant Kit

• Annunciators

• PowerMasterTM

• GenLink®

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MERCHANDISING & TRAINING

Dedicated Technical Support

• 1-800 line: 888-609-9711i & t ti– service & support questions

• E-fax line: 888-609-9712– order status, order placement

• Interactive website link• Technical support literature

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Training Web-casts

• Scheduled web-casts from technical expertsL i t G b– Log into Generac.webex.com

– Pre-authorized participation

Generac Training Seminars

• 2 day seminars - in depth training – in MilwaukeeState of the art training facility by Engineering experts• State of the art training facility – by Engineering experts

• Certified and accredited

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Dealer Events

• Sales Meetings, shows and other live demo events

Merchandising Aids/POP

In-store displays, counter di l t tdisplays, counter mats, banners and signage

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Targeted End-user Material

• Post cards, door hangers, literature

Pull Through Support

Promotional Funds, Employee Opportunities, Advertising Monies

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ENERGYOPPORTUNITYOPPORTUNITY

• Existing home opportunity- 98% of Guardians sold are retrofitted- Less than 1% of the homes own HSB- 99% of customers would put HSB on their next home

- Homeowner demand growingN t ti t it• New construction opportunity- Easier to afford on mortgage- Most economical Installation- Differentiate from competition- Homeowner demand growing

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Business Lost SalesP

TypicalkW

Appx. Installed

G t

PaybackHours

Commercial Opportunity6M ll b i i th U S Per

HourGenerator

Cost

Gas/Convenience Store

$445 35 $13,200 30

High Volume Restaurant

$705 45 $15,200 22

Drug Store $1,400 60 $18,100 13

Supermarket $43,510 150 $36,100 10

• 6M+ small business in the U.S.

• 80% have experienced an outage in the last year

• Of those, 29% w/o power for 8hrs. & 19% w/o power for 16hrs. during a single outage

62% h b k• 62% have no backup power system

• 58% say they would consider purchasing a backup system if it made economical sense

– Our complementary products and services are a natural up-sell and fit; Standby generators put the “romance” in NG

Your Opportunity

and fit; Standby generators put the romance in NG– Standby generators are the “hook” to penetrate non-NG users

and electric appliance based homes– You have existing long term relationships with home owners,

home builders and commercial customers– We have a current need to promote additional burner tips and

increase the overall gas load – You have the ability to bundle these products/servicesy p– Standby generators provide an off-season sales opportunity &

and repetitive service/maintenance contracts– You can differentiate yourselves from the competition– You can generate more dollars while driving more volume– You can take advantage of a rapidly growing opportunity

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To Get Involved in Generators

• Partner with existing local Guardian generator dealersd l d f l- trade leads, resources, referrals

• Add local generator dealers to NG contractor networks

• Add generator category to existing contactor networks- become a dealer

training merchandising technical support- training, merchandising, technical support- installs, service , maintenance contracts

• Product available through gas equipment wholesalers

Summary

• Generators are our only business• We dominate the category and drive market growth• We lead in innovation, quality and value• We have the largest manufacturing facilities,

largest selection of product and the largest service knetwork

• We are committed to training and support• We want your business

Thank You