MOVING THE WORLD AT WORK Charles L. Szews Chief Executive Officer - - PowerPoint PPT Presentation

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Fourth Quarter Fiscal 2015

October 29, 2015

Charles L. Szews Chief Executive Officer Wilson R. Jones President and Chief Operating Officer David M. Sagehorn Executive Vice President and Chief Financial Officer Patrick N. Davidson Vice President, Investor Relations

Oshkosh Corporation

(NYSE:OSK)

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Forward-Looking Statements

This presentation contains statements that the Company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including, without limitation, statements regarding the Company’s future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, are forward-looking

• statements. When used in this presentation, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,”

“should,” “project” or “plan” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, which are particularly impacted by the strength of U.S. and European economies; the Company’s estimates of access equipment demand; the strength of the U.S. dollar and its impact on Company exports, translation of foreign sales and purchased materials; the expected level and timing of U.S. Department of Defense (“DoD”) and international defense customer procurement of products and services and funding thereof; risks related to reductions in government expenditures in light of U.S. defense budget pressures, sequestration and an uncertain DoD tactical wheeled vehicle strategy; risks related to the Company’s future defense segment sales as a result of the outcome of a competitor’s protest of the JLTV production contract award to the Company; the Company’s ability to finalize an international contract for a significant quantity

• f M-ATVs, with the majority of the units sold in fiscal 2016; the Company’s ability to increase prices to raise margins or offset higher

input costs; increasing commodity and other raw material costs, particularly in a sustained economic recovery; risks related to facilities expansion, consolidation and alignment, including the amounts of related costs and charges and that anticipated cost savings may not be achieved; global economic uncertainty, which could lead to additional impairment charges related to many of the Company’s intangible assets and/or a slower recovery in the Company’s cyclical businesses than Company or equity market expectations; projected adoption rates of work at height machinery in emerging markets; the impact of severe weather or natural disasters that may affect the Company, its suppliers or its customers; risks related to the collectability of receivables, particularly for those businesses with exposure to construction markets; the cost of any warranty campaigns related to the Company’s products; risks related to production or shipment delays arising from quality or production issues; risks associated with international operations and sales, including compliance with the Foreign Corrupt Practices Act; the Company’s ability to comply with complex laws and regulations applicable to U.S. government contractors; cybersecurity risks and costs of defending against, mitigating and responding to a data security breach; and risks related to the Company’s ability to successfully execute on its strategic road map and meet its long-term financial goals. Additional information concerning these and other factors is contained in the Company’s filings with the Securities and Exchange Commission, including the Form 8-K filed today. All forward-looking statements speak only as of the date

• f this presentation. The Company assumes no obligation, and disclaims any obligation, to update information contained in this
• presentation. Investors should be aware that the Company may not update such information until the Company’s next quarterly

earnings conference call, if at all.

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 2

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Q4 FY15 Results

• Q4 adjusted EPS* of $0.67
• In line with revised expectations
• Taking actions to reduce costs

and inventory in Access Equipment

• Defense recovery underway

− Restarted FHTV sales − Awarded international contract for 273 M-ATVs

• JLTV win provides long-term

stability to Defense outlook

− Expect award to Oshkosh to be upheld

• Repurchased 2.9 million shares

for $112 million

Net Sales

(billions)

Adjusted EPS*

3

$1.6 $1.7 $0.67 $0.96 $0.00 $0.25 $0.50 $0.75 $1.00 $1.25 $0.0 $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 $1.6 $1.8 FY15 FY14

Net Sales Adjusted EPS*

* Non-GAAP results. See Appendix for reconciliation to GAAP results.

OSK Fiscal Q4 Performance

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Full Year Results

• Full year results negatively

impacted by:

– Trough in Defense earnings – Mid-cycle dip in Access Equipment demand

• Set foundation for strong

Defense earnings growth

• Sustained margin enhancement

at Fire & Emergency and Commercial

• Repurchased 4.9 million shares
• r 6.1% of outstanding shares
• Announced 12% dividend

increase effective November

• FY16 EPS estimate range of

$3.00 to $3.40

Net Sales

(billions)

Adjusted EPS*

OSK Full Year Performance

* Non-GAAP results. See Appendix for reconciliation to GAAP results. $6.1 $6.8 $3.02 $3.62 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 FY15 FY14

Net Sales Adjusted EPS* 4 October 29, 2015 OSK Fourth Quarter 2015 Earnings Call

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Positive Long-Term Outlook for Oshkosh

• Leading brands with excellent long-term

prospects

 Growing Defense portfolio with increasing global demand  Continued global penetration of Access Equipment and sustained North American construction growth

• Commitment to smart capital allocation

 Disciples of “The Outsiders”  Expected strong free cash flow provides

• pportunity to enhance shareholder returns
• Strong, experienced leaders to execute

roadmap to deliver strong shareholder returns

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 5

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Defense

• Won DoD’s JLTV competition in August

− Contract for 17,000 vehicles over 8 years − Program expected to yield 55,000 vehicles domestically over 20+ years − Expect strong interest from international allies − GAO decision on competitor protest in December

• M-ATV continues to gain interest globally

 Introduced new 6x6 M-ATV Technology Demonstrator  Total of nine M-ATV variants to conduct a wide variety of missions

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 6

JLTV M-ATV 6x6

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Access Equipment

• Mid-cycle dip accelerated into 2015

− Driven by weather and oil & gas impact − Light replacement demand after low purchases in 2009 - 2010

• Improving residential and non-residential

construction driving equipment usage and long-term confidence

• Expect mid-cycle sales decline of

approximately 10% - 15% in FY16

• International markets 2016 outlook mixed

 Europe down (due to currency)  Latin America expected to remain weak  Asia and Australia steady

• Reducing production rate and workforce

− Will drive inventory reduction − Margin pressure due to under-absorption

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 7

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Fire & Emergency

• Strong quarter to finish the year

− Higher revenues, operating income & margins − Elevated backlog

• Pierce share gains at a time when

the market is still below historical norms

 Driven by strong new product launches

• Improved results from operational

changes

− Still more work to do, but business improvement roadmap is delivering higher margins

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 8

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Commercial

• RCV sales grew double

digits again in the quarter

 Replacement demand recovering  Share growing due to success of new product launches

• Concrete mixer sales down

in the quarter

 Continuation of market slowdown that began in third quarter  Positive view on longer-term

• North American

construction growth

• Aged fleets

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 9

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Consolidated Results

• Sales impacted by:

 Lower Access Equipment segment sales  Higher Defense, Fire & Emergency and Commercial segment sales

• EPS impacted by:

 Lower Access Equipment segment results  Higher tax rate  Higher Defense, Fire & Emergency and Commercial segment results  Lower Corporate expenses  Lower share count

Q4 Comments

(Dollars in millions, except per share amounts)

Fourth Quarter

Net Sales $1,578.3 $1,667.7 % Change (5.4)% (3.4)% Adjusted Operating Income* $89.5 $116.9 % Change (23.4)% 49.7% % Margin 5.7% 7.0% Adjusted EPS* $0.67 $0.96 % Change (30.2)% 95.9% 2015 2014

* Non-GAAP results. See Appendix for reconciliation to GAAP results.

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 10

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Expectations for FY16

Additional expectations

• Corporate expenses of $145 - $150 million
• Tax rate of ~ 34%
• CapEx of ~ $100 million
• Free Cash Flow* ~ $350 million
• Assumes share count of ~ 75 million

Segment information

• Revenues of ~ $6.2 - $6.5 billion
• Operating income of $400 million to $440 million
• EPS of $3.00 to $3.40

* Non-GAAP results. See Appendix for reconciliation to GAAP results.

11

Quarterly commentary

• Earnings weighted to second half

 Increased international M-ATV sales  Seasonality  Cautious construction equipment customers

• First quarter slightly profitable

Measure Access Equipment Defense Fire & Emergency Commercial

Sales (billions) $2.9 to $3.05 ~ $1.55 ~ $0.9 ~ $1.0 Operating Income Margin ~ 10.5% ~ 8.75% ~ 6.0% ~ 7.0%

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

For information contact:

Patrick N. Davidson Vice President, Investor Relations (920) 966-5939 pdavidson@oshkoshcorp.com Jeffrey D. Watt Director, Investor Relations (920) 233-9406 jwatt@oshkoshcorp.com

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 12

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Net Sales $769.5 $932.7 % Change (17.5)% 19.5% Adjusted Operating Income $59.0* $127.4 % Change (53.7)% 41.3% % Margin 7.7% 13.7%

Fourth Quarter

(Dollars in millions)

2015 2014

Appendix: Access Equipment

• Sales impacted by:

 Lower North America demand  Unfavorable foreign currency  Higher European demand

• Operating income impacted by:

 Lower sales volume  Unfavorable product mix  Unfavorable absorption  Used equipment valuation reserves  Lower incentive compensation expense

• Backlog down 45% vs. prior

year to $210 million

Q4 Comments

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 13

* Non-GAAP results. See Appendix for reconciliation to GAAP results.

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Appendix: Defense

• Sales impacted by:

 M-ATV reset volume  International M-ATV sales  Lower FHTV and FMTV sales

• Operating income impacted by:

 Higher sales volume  Favorable absorption  Lower SG&A

• Backlog up 81% vs. prior year

to $1.4 billion, including $0.1 billion related to JLTV contract award

Q4 Comments

Net Sales $317.6 $288.1 % Change 10.3% (43.9)% Adjusted Operating Income $18.5 $1.8* % Change 935.7% (88.1)% % Margin 5.8% 0.6%

Fourth Quarter

(Dollars in millions)

2015 2014

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 14

* Non-GAAP results. See Appendix for reconciliation to GAAP results.

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Net Sales $245.4 $214.9 % Change 14.2% (7.4)% Operating Income $23.7 $12.5 % Change 89.2% 35.3% % Margin 9.6% 5.8%

Fourth Quarter

(Dollars in millions)

2015 2014

Appendix: Fire & Emergency

• Sales impacted by:

 Higher fire apparatus volume

• Operating income impacted by:

 Higher sales volume  Favorable absorption

• Backlog up 39% vs. prior year

to $790.7 million

Q4 Comments

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 15

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Appendix: Commercial

• Sales impacted by:

 Higher RCV volume  Lower concrete mixer volume

• Operating income impacted by:

 Stronger mix of RCV sales  Higher sales volume  MOVE investments

• Backlog up 20.7% vs. prior

year to $193 million

Q4 Comments

Net Sales $252.9 $243.7 % Change 3.8% 16.4% Operating Income $21.1 $18.4 % Change 14.6% 17.3% % Margin 8.4% 7.6%

Fourth Quarter

(Dollars in millions)

2015 2014

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 16

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

Appendix: Commonly Used Acronyms

17 October 29, 2015 OSK Fourth Quarter 2015 Earnings Call

ARFF Aircraft Rescue and Firefighting MECV Modernized Expanded Capability Vehicle AWP Aerial Work Platform MRAP Mine Resistant Ambush Protected CapEx Capital Expenditures MSVS Medium Support Vehicle System (Canada) CNG Compressed Natural Gas NOL Net Operating Loss DGE Diesel Gallon Equivalent NPD New Product Development DoD Department of Defense NRC National Rental Company EAME Europe, Africa & Middle East OCO Overseas Contingency Operations EMD Engineering & Manufacturing Development OH Overhead EPS Diluted Earnings Per Share OI Operating Income FHTV Family of Heavy Tactical Vehicles OOS Oshkosh Operating System FMS Foreign Military Sales OPEB Other Post-Employment Benefits FMTV Family of Medium Tactical Vehicles PLS Palletized Load System GAAP U.S. Generally Accepted Accounting Principles PUC Pierce Ultimate Configuration GAO Government Accountability Office R&D Research & Development HEMTT Heavy Expanded Mobility Tactical Truck RCV Refuse Collection Vehicle HET Heavy Equipment Transporter RFP Request for Proposal HMMWV High Mobility Multi-Purpose Wheeled Vehicle ROW Rest of World IRC Independent Rental Company SMP Standard Military Pattern (Canadian MSVS) IT Information Technology TACOM Tank-automotive and Armaments Command JLTV Joint Light Tactical Vehicle TDP Technical Data Package JPO Joint Program Office TPV Tactical Protector Vehicle JROC Joint Requirements Oversight Council TWV Tactical Wheeled Vehicle JUONS Joint Urgent Operational Needs Statement UCA Undefinitized Contract Action L-ATV Light Combat Tactical All-Terrain Vehicle UIK Underbody Improvement Kit (for M-ATV) LVSR Logistic Vehicle System Replacement UK United Kingdom M-ATV MRAP All-Terrain Vehicle ZR Zero Radius

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 18

Appendix: Non-GAAP to GAAP Reconciliation

• The table below presents a reconciliation of the Company’s presented non-GAAP measures to the most directly

comparable GAAP measures (in millions):

2015 2014 2015 2014 Adjusted Access Equipment segment operating income (non-GAAP) 59.0 $ 127.4 $ 7.7% 13.7% Workforce reduction charges (2.5)

• 0.4%
• Access Equipment segment operating income (GAAP)

56.5 $ 127.4 $ 7.3% 13.7% Adjusted Defense segment operating income (non-GAAP) 18.5 $ 1.8 $ 5.8% 0.6% Pension and OPEB curtailment/settlement

• (3.8)
• 1.3%

Defense segment operating income (loss) (GAAP) 18.5 $ (2.0) $ 5.8%

• 0.7%

Adjusted consolidated operating income (non-GAAP) 89.5 $ 116.9 $ 5.7% 7.0% Pension and OPEB curtailment/settlement

• (3.8)
• 0.2%

Workforce reduction charges (2.9)

• 0.2%
• Consolidated operating income (GAAP)

86.6 $ 113.1 $ 5.5% 6.8% Three Months Ended September 30, Three Months Ended September 30,

MOVING THE WORLD AT WORK

Oshkosh Corporation Classification: Highly Restricted

October 29, 2015 OSK Fourth Quarter 2015 Earnings Call 19

Appendix: Non-GAAP to GAAP Reconciliation

• The table below presents a reconciliation of the Company’s presented non-GAAP measures to the most directly

comparable GAAP measures (in millions, except per share amounts):

2015 2014 2015 2014 Adjusted earnings per share - diluted (non-GAAP) 0.67 $ 0.96 $ 3.02 $ 3.62 $ Reduction of valuation allowance on net operating loss carryforward

• 0.14

Pension and OPEB curtailment/settlement, net of tax

• (0.03)

0.03 0.01 Contract pricing adjustment for OPEB costs, net of tax

• (0.08)

Debt extinguishment costs, net of tax

• (0.12)

(0.08) Workforce reduction charges, net of tax (0.03)

• (0.03)
• Earnings per share - diluted (GAAP)

0.64 $ 0.93 $ 2.90 $ 3.61 $ Fiscal 2015 Fiscal 2016 Actual Expectations Net cash flows provided by operating activities 82.5 $ 475.0 $ Additions to property, plant and equipment (131.7) (100.0) Net additions to equipment held for rental 0.5 (25.0) Free cash flow (usage) (48.7) $ 350.0 $ Three Months Ended Fiscal Year Ended, September 30, September 30,