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MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
Third Quarter Fiscal 2015 July 30, 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 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, including the Company’s ability to successfully manage the cost reductions required as a result of lower customer orders in the defense segment; the Company’s ability to win a JLTV production contract award and finalize international contracts for a significant quantity of M-ATVs, with sales beginning 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 of 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 30, 2015 OSK Third Quarter 2015 Earnings Call 2
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
Q3 FY15 Results
Q3 EPS of $1.13
- Below expectations
- Shortfall due to lower year over year sales of access equipment
Updated FY15 adjusted EPS* estimate to range of $3.00 to $3.25
Defense segment positioned for stronger performance in FY16
Magnitude, along with improved fire & emergency and commercial segment results, provides overall positive outlook for Oshkosh EPS growth in FY16
Expect to become active again with share repurchases
Net Sales (billions)
EPS
3
$1.6
$1.9
$1.13 $1.23*
$0.00
$0.25
$0.50
$0.75
$1.00
$1.25
$1.50
$0.0
$0.2
$0.4
$0.6
$0.8
$1.0
$1.2
$1.4
$1.6
$1.8
$2.0
FY15 FY14Net Sales EPS
* Non-GAAP results. See Appendix for reconciliation to GAAP results.
OSK Fiscal Q3 Performance
July 30, 2015 OSK Third Quarter 2015 Earnings Call
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
Defense
First yr/yr backlog increase since 2011
Secured contract orders for FHTV
recapitalization and FMTV
FHTV sales to restart in Q4
Expect to ship 150 M-ATVs internationally
in Q4; revenue recognition now assumed
in FY16
Progress pursuing much larger M-ATV
orders to benefit FY16 and beyond
Not awarded Canadian MSVS contract
Expect JLTV decision in September
July 30, 2015 OSK Third Quarter 2015 Earnings Call 4
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
Access Equipment
Believe fundamental business drivers remain
intact
Improving U.S. residential and non-residential
construction; strong rental company metrics
Moderating replacement demand for aged fleets
in Europe
Product adoption in developing markets
Expect mid-cycle sales decline of
approximately 5% - 10% in FY16 primarily
due to lower U.S. and European replacement
demand
Actions to address inventory levels and costs
Acquired Power Towers low level access
business
July 30, 2015 OSK Third Quarter 2015 Earnings Call 5
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
Fire & Emergency
Progress addressing operational
efficiencies
Assembly line changes completed
in Q3
Expect modest North American
market growth in 2015
Strong orders at Pierce led to share
gains
Innovative new product offerings at
recent industry gatherings
Revolutionary Ascendant™ single
rear axle 107’ aerial ladder
Oshkosh® XP fire apparatus
introduced at Interschutz 2015
July 30, 2015 OSK Third Quarter 2015 Earnings Call 6
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
Commercial
Double digit sales growth
led by RCV products
Growing RCV share in a slowly
improving market
New Meridian lighter weight
RCV introduced at Waste
Expo in June
Concrete mixer sales up
Driven by higher content units
Experienced order slowdown
in Q3
July 30, 2015 OSK Third Quarter 2015 Earnings Call 7
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
Consolidated Results
Sales impacted by:
Lower defense and access
equipment segment sales
Higher commercial and fire &
emergency segment sales
EPS impacted by:
Lower defense and access
equipment segment results
Foreign currency exchange
Higher commercial and fire &
emergency segment results
Lower incentive compensation
Lower share count
Tax audit settlement
Q3 Comments
(Dollars in millions, except per share amounts)
Third Quarter
Net Sales $1,612.3 $1,932.4
% Change (16.6)% (12.3)%
Operating Income $136.6 $175.3*
% Change (22.1)% (22.3)%
% Margin 8.5% 9.0%
EPS $1.13 $1.23*
% Change (8.1)% (26.3)%
2015 2014
* Non-GAAP results. See Appendix for reconciliation to GAAP results.
July 30, 2015 OSK Third Quarter 2015 Earnings Call 8
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
Updated Expectations for FY15
Additional expectations Corporate expenses of $125 - $130 million
Tax rate of ~ 32%
CapEx of ~ $150 million
Cash usage* ~ $150 million
Assumes share count of ~ 79.5 million
Segment information
Revenues of ~ $6.1 billion
Adjusted operating income* of $400 million to $425 million
Adjusted EPS* of $3.00 to $3.25
* Non-GAAP results. See Appendix for reconciliation to GAAP results.
9
Q4 Commentary EPS lower than prior year as a result of lower
expected access equipment sales and operating
income
Measure Access
Equipment Defense
Fire & Emergency Commercial
Sales
(billions) ~ $3.4 ~ $0.9 ~ $0.8 ~ $1.0
Operating
Income Margin ~ 12.8%
Slightly Above
Break Even ~ 4.25% ~ 6.5%
July 30, 2015 OSK Third 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
July 30, 2015 OSK Third Quarter 2015 Earnings Call 10
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
Net Sales $932.6 $1,039.2
% Change (10.3)% 10.4%
Operating Income $136.4 $166.8
% Change (18.2)% 8.0%
% Margin 14.6% 16.0%
Third Quarter
(Dollars in millions)
2015 2014
Appendix: Access Equipment
Sales impacted by:
Reduced deliveries as a result of weather-related construction delays and oil & gas price decline
Unfavorable foreign currency
New product launch challenges
Operating income impacted by:
Lower sales volume
Unfavorable currency impact of $6.9 million
New product launch challenges
Lower incentive compensation
Backlog down 19% vs. prior year to $395 million (down 14% on a constant currency basis)
Q3 Comments
July 30, 2015 OSK Third Quarter 2015 Earnings Call 11
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
Appendix: Defense
Sales impacted by:
FHTV break in production
Lower FMTV sales
International M-ATV sales in prior
year
Operating income impacted by:
Lower sales volume
Backlog up 38% vs. prior year
to $1.2 billion
First increase in yr/yr backlog
since Q4 2011
Q3 Comments
Net Sales $194.2 $470.7
% Change (58.7)% (46.5)%
Adjusted Operating
Income / (Loss) $(7.1) $20.1*
% Change (135.3)% (76.6)%
% Margin (3.7)% 4.2%
Third Quarter
(Dollars in millions)
2015 2014
July 30, 2015 OSK Third Quarter 2015 Earnings Call 12
* Non-GAAP results. See Appendix for reconciliation to GAAP results.
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
Net Sales $199.8 $187.5
% Change 6.6% (8.3)%
Operating Income $9.6 $6.2
% Change 55.5% (5.2)%
% Margin 4.8% 3.3%
Third Quarter
(Dollars in millions)
2015 2014
Appendix: Fire & Emergency
Sales impacted by:
Higher content fire trucks
Higher airport products unit
shipments
Operating income impacted by:
Higher sales volume
Backlog up 42% vs. prior year
to $761 million
Q3 Comments
July 30, 2015 OSK Third Quarter 2015 Earnings Call 13
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
Appendix: Commercial
Sales impacted by:
Higher RCV unit sales
Higher content concrete mixer
sales
Operating income impacted by:
Higher sales volume
MOVE investments
Backlog up 5.4% vs. prior year
to $218 million
Q3 Comments
Net Sales $294.0 $247.3
% Change 18.9% 27.0%
Operating Income $22.4 $19.9
% Change 12.9% 98.6%
% Margin 7.6% 8.0%
Third Quarter
(Dollars in millions)
2015 2014
July 30, 2015 OSK Third Quarter 2015 Earnings Call 14
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
Appendix: Commonly Used Acronyms
15 July 30, 2015 OSK Third 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
HEMTT Heavy Expanded Mobility Tactical Truck R&D Research & Development
HET Heavy Equipment Transporter RCV Refuse Collection Vehicle
HMMWV High Mobility Multi-Purpose Wheeled Vehicle RFP Request for Proposal
IRC Independent Rental Company ROW Rest of World
IT Information Technology SMP Standard Military Pattern (Canadian MSVS)
JLTV Joint Light Tactical Vehicle TACOM Tank-automotive and Armaments Command
JPO Joint Program Office TDP Technical Data Package
JROC Joint Requirements Oversight Council TPV Tactical Protector Vehicle
JUONS Joint Urgent Operational Needs Statement TWV Tactical Wheeled Vehicle
L-ATV Light Combat Tactical All-Terrain Vehicle UCA Undefinitized Contract Action
LVSR Logistic Vehicle System Replacement UIK Underbody Improvement Kit (for M-ATV)
M-ATV MRAP All-Terrain Vehicle UK
ZR
United Kingdom
Zero Radius
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
July 30, 2015 OSK Third Quarter 2015 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, except per share amounts):
2015 2014 2015 2014
Adjusted defense operating income (loss) (non-GAAP) (7.1)$ 20.1$ (12.7)$ 83.5$
Pension and OPEB curtailment - 9.7 3.4 5.6
Contract pricing adjustment for OPEB costs - (10.7) - (10.7)
Defense operating income (loss) (GAAP) (7.1)$ 19.1$ (9.3)$ 78.4$
Adjusted operating income (non-GAAP) 136.6$ 175.3$ 308.6$ 395.3$
Pension and OPEB curtailment - 9.7 3.4 5.6
Contract pricing adjustment for OPEB costs - (10.7) - (10.7)
Operating income (GAAP) 136.6$ 174.3$ 312.0$ 390.2$
Adjusted net income (non-GAAP) 89.9$ 105.7$ 186.4$ 229.6$
Reduction of valuation allowance on net operating
loss carryforward - - - 12.1
Pension and OPEB curtailment, net of tax - 6.2 2.1 3.6
Contract pricing adjustment for OPEB costs, net of tax - (6.8) - (6.8)
Debt extinguishment costs, net of tax - - (9.3) (7.0)
Net income (GAAP) 89.9$ 105.1$ 179.2$ 231.5$
Adjusted earnings per share-diluted (non-GAAP) 1.13$ 1.23$ 2.34$ 2.66$
Reduction of valuation allowance on net operating
loss carryforward - - - 0.14
Pension and OPEB curtailment, net of tax - 0.07 0.03 0.04
Contract pricing adjustment for OPEB costs, net of tax - (0.08) - (0.08)
Debt extinguishment costs, net of tax - - (0.12) (0.08)
Earnings per share-diluted (GAAP) 1.13$ 1.22$ 2.25$ 2.68$
Three Months Ended
June 30,
Nine Months Ended
June 30,
MOVING THE WORLD AT WORK
Oshkosh Corporation Classification: Highly Restricted
July 30, 2015 OSK Third Quarter 2015 Earnings Call 17
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):
Low High
Adjusted operating income (non-GAAP) 400.0$ 425.0$
OPEB curtailment gain 3.4 3.4
Operating income (GAAP) 403.4$ 428.4$
Adjusted earnings per share - diluted (non-GAAP) 3.00$ 3.25$
OPEB curtailment gain, net of tax 0.03 0.03
Debt extinguishment costs, net of tax (0.12) (0.12)
Earnings per share - diluted (GAAP) 2.91$ 3.16$
Fiscal 2015
Expectations
Net cash flows from operating activities 10.0$
Additions to property, plant and equipment (150.0)
Net additions to equipment held for rental (10.0)
Cash usage (150.0)$
Fiscal 2015 Expectations
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