MOVING THE WORLD AT WORK Wilson R. Jones President and Chief - - PowerPoint PPT Presentation

MOVING THE WORLD AT WORK

Third Quarter Fiscal 2016

July 28, 2016

Wilson R. Jones President and Chief Executive 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

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 press release, 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 and construction seasons; the Company’s estimates of access equipment demand which, among other factors, is influenced by customer historical buying patterns and rental company fleet replacement strategies; the strength of the dollar and its impact on Company exports, translation of foreign sales and purchased materials; the expected level and timing of U.S. DoD and international defense customer procurement of products and services and funding or payments thereof; the Company’s ability to utilize material and components which it has committed to purchase from suppliers; higher material costs resulting from production variability due to uncertainty of timing of funding or payments from international defense customers; risks related to reductions in government expenditures in light of U.S. defense budget pressures, sequestration and an uncertain DoD tactical wheeled vehicle strategy; the impact of any DoD solicitation for competition for future contracts to produce military vehicles, including a future FMTV production contract; 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.

July 28, 2016 OSK Third Quarter 2016 Earnings Call 2

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Q3 FY16

• Q3 FY16 EPS of $1.13

− Equal to Q3 FY15

• Higher defense and fire &

emergency segment sales

• Higher operating income margin
• vs. prior year in defense, fire &

emergency and commercial segments

• Progress on funding and

delivery schedules for the large international M-ATV order

• Increased full year EPS outlook

to range of $2.60 to $2.80

Net Sales

(billions)

EPS

3

$1.7 $1.6 $1.13 $1.13 $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 $2.0 FY16 FY15

Net Sales EPS

OSK Fiscal Q3 Performance

July 28, 2016 OSK Third Quarter 2016 Earnings Call

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Access Equipment

• North America market remains cautious

− Lower replacement demand − Rental companies selective with capital expenditures

• Solid activity in Europe

− Continued access equipment market recovery

• Brazil extremely depressed
• Asia-Pacific growth and ongoing impact
• f mining slowdown in Australia
• Challenging pricing environment
• On track to achieve inventory reduction

target by year-end

• Positive long-term trends

July 28, 2016 OSK Third Quarter 2016 Earnings Call 4

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Defense

• Strong defense segment outlook
• New segment president – promotion of

John Bryant

− Ret. USMC colonel - 28 years experience − Led Oshkosh U.S. TWV programs

• JLTV ramp up gaining momentum

− Higher levels of test & development activities − Solid long-term international potential

• Progress on funding and delivery

schedules for international M-ATVs

− Positive impact on FY16 performance

July 28, 2016 OSK Third Quarter 2016 Earnings Call 5

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Fire & Emergency

• Solid performance led by Pierce

− Executed production rate increase in Wisconsin and Florida, with additional increase in Q4 FY16

• Modest market recovery continues

− Improved municipal tax receipts − Fleet replacement

• New products and technologies

driving customer excitement

July 28, 2016 OSK Third Quarter 2016 Earnings Call 6

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Commercial

• Higher operating income on slightly

lower sales

• Continued solid RCV business

− Replacement demand − Solid construction activity and improved municipal tax receipts − Share gains − Prior year large international sale

• Seasonal concrete mixer demand

increase − Continued strong front discharge demand − Cautious rear discharge customers

July 28, 2016 OSK Third Quarter 2016 Earnings Call 7

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Consolidated Results

• Sales impacted by:

 Higher defense, fire & emergency and access equipment segment sales

• EPS impacted by:

 Higher defense, fire & emergency and commercial segment results  Lower share count  Lower access equipment segment results  Higher tax rate  Higher incentive compensation

Q3 Comments

(Dollars in millions, except per share amounts)

Third Quarter

Net Sales $1,747.5 $1,612.3 % Change 8.4% (16.6)% Operating Income $146.8 $136.6 % Change 7.5% (22.1)% % Margin 8.4% 8.5% EPS $1.13 $1.13 % Change 0.0% (7.4)% 2016 2015

July 28, 2016 OSK Third Quarter 2016 Earnings Call 8

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Updated Expectations for FY16

Additional expectations

• Corporate expenses of $150 - $155 million
• Tax rate of ~ 32%
• CapEx of ~ $100 million
• Free Cash Flow* ~ $400 million
• Assumes share count of ~ 74.5 million

Segment information

• Revenues of ~ $6.0 to $6.1 billion
• Operating income of $340 million to $360 million
• EPS of $2.60 to $2.80

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

9

• Increased full year EPS estimate range

 Added ~ 175 international M-ATVs in Q4  Improved F&E performance  Reduced access equipment operating margin expectations  Increased incentive compensation expense  Higher tax rate

Measure Access Equipment Defense Fire & Emergency Commercial

Sales (billions) $2.9 to $2.95 ~$1.25 ~ $0.95 ~ $1.0 Operating Income Margin 9.5% - 9.75% ~ 7.75% ~ 6.75% ~ 7.0%

July 28, 2016 OSK Third Quarter 2016 Earnings Call

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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

July 28, 2016 OSK Third Quarter 2016 Earnings Call 10

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Net Sales $952.5 $932.6 % Change 2.1% (10.3)% Operating Income $122.1 $136.4 % Change (10.4)% (18.2)% % Margin 12.8% 14.6%

Third Quarter

(Dollars in millions)

2016 2015

Appendix: Access Equipment

• Sales impacted by:

 Higher volume in North America, primarily telehandlers − Competitive pricing

• Operating income impacted by:

− Competitive pricing − Prior year reversal of accrued incentive compensation expense  Lower spending on engine emissions standards changes  Higher sales volume

• Backlog down 5% vs. prior year

to $375 million

Q3 Comments

July 28, 2016 OSK Third Quarter 2016 Earnings Call 11

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Appendix: Defense

• Sales impacted by:

 Higher FHTV volume

• Operating income impacted by:

 Favorable product mix  Contractual price increases  Higher sales volume

• Backlog up 88% vs. prior year

to $2.3 billion

Q3 Comments

Net Sales $264.3 $194.2 % Change 36.1% (58.7)% Operating Income / (Loss) $19.1 $(7.1) % Change 369.3% (137.0)% % Margin 7.2% (3.7)%

Third Quarter

(Dollars in millions)

2016 2015

July 28, 2016 OSK Third Quarter 2016 Earnings Call 12

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Net Sales $248.5 $199.8 % Change 24.4% 6.6% Operating Income $19.7 $9.6 % Change 105.0% 55.5% % Margin 7.9% 4.8%

Third Quarter

(Dollars in millions)

2016 2015

Appendix: Fire & Emergency

• Sales impacted by:

 Higher Pierce fire truck volume

• Operating income impacted by:

 Higher sales volume  Improved pricing

• Backlog up 12% vs. prior year

to $853 million

Q3 Comments

July 28, 2016 OSK Third Quarter 2016 Earnings Call 13

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Appendix: Commercial

• Sales impacted by:

− Lower international RCV volume

• Operating income impacted by:

 Improved product mix

• Backlog down 5% vs. prior year

to $206 million

Q3 Comments

Net Sales $287.9 $294.0 % Change (2.1)% 18.9% Operating Income $23.8 $22.4 % Change 6.2% 12.9% % Margin 8.3% 7.6%

Third Quarter

(Dollars in millions)

2016 2015

July 28, 2016 OSK Third Quarter 2016 Earnings Call 14

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Appendix: Commonly Used Acronyms

15 July 28, 2016 OSK Third Quarter 2016 Earnings Call

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

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July 28, 2016 OSK Third Quarter 2016 Earnings Call 16

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):

Fiscal 2016 Expectations Net cash flows provided by operating activities $ 500.0 Additions to property, plant and equipment (100.0) Free cash flow $ 400.0