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MOVING THE WORLD AT WORK
Oshkosh Corporation (NYSE:OSK)
KeyBanc Industrial ConferenceJune 2, 2016
MOVING THE WORLD AT WORK
Forward-Looking Statements
2June 2, 2016Investor Handout
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 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 or paymentsthereof; 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 payment 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 thatmay 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; risksrelated 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 April 28, 2016. All forward-looking statements speak only as of April 28, 2016. 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.
MOVING THE WORLD AT WORK
Why Oshkosh Corporation?
3June 2, 2016Investor Handout
Defense , F&E and RCV+ Solid market outlook+ Strong backlogs+ JLTV ramp & Int’l M-ATVs+ Fire & Emergency and RCV share gains+ Improving OI margins
Access Equipment / Concrete Mixers+ Benefitting from construction growth- Cautious approach by customers- Soft replacement-driven access equipment
demand
OSK:A Different Integrated
Global Industrial
Expected FCF Provides Options+ Solid earnings+ Working capital reduction
MOVING THE WORLD AT WORK
Oshkosh Corporation –A Different Integrated Global Industrial
Technology leader supplying industry's top specialty vehicles& access equipment Serial innovator of game
changing new products Focused on delivering value to
customers and shareholders Leverage cross segment
expertise and resources
4
(1) As of May 25, 2016
Access Equipment Defense
Fire & Emergency
June 2, 2016Investor Handout
Fire & Emergency CommercialIncorporated 1917- Nearly 100 Yearsin Business
Market Cap (1) - $3.3 billion
OSK – NYSE ticker
MOVING THE WORLD AT WORK
MOVE Strategy Evolves to Drive Performance…
Focuses on drivers that create highest shareholder value Supports higher margin
targets through the cycle
5June 2, 2016Investor Handout
…In FY16 and Beyond
MOVING THE WORLD AT WORK
DefenseReturning to Growth on a Strong Foundation
June 2, 2016Investor Handout 6
Improved defense segment outlook
JLTV ramp up gaining momentum− Production ramp up (FY17-19) quicker
than previous expectations
Positive multi-year domestic outlook− FY16 contract awards
− FY17 budget request
Continue to be active internationally − Awarded contract for more than 1,000
M-ATVs (finalizing funding and delivery schedule)
− Pursuing multiple other opportunities
MOVING THE WORLD AT WORK
Access EquipmentPositive Long-Term Outlook Despite Near Term Challenges
June 2, 2016Investor Handout 7
Mixed global market conditions continue
Positive sentiment at recent trade shows− BAUMA 2016− ARA Rental Show
Strong new product launches
Inventory reduction expected to continue in second half of FY16
Believe long-term trends are positive− Construction growth− Global product adoption− New applications for access
equipment
MOVING THE WORLD AT WORK
Fire & EmergencyImproving Execution Driving Market Leadership to New Heights
June 2, 2016Investor Handout 8
Continued modest market recovery Improved municipal spending Large city fleet replacement
Revolutionary Ascendant™ two-axle aerial ladder truck continues to gain momentum– Three new variants launched at FDIC− Contributing to share gains
Raising production rate in FY16 Leveraging improved operational
performance Increased production rate in February Additional increase planned in Q4
MOVING THE WORLD AT WORK
CommercialStrong RCV Fleet Replenishment and New Product Launches
June 2, 2016Investor Handout 9
Fleet replenishment driving RCV market growth– OSK products achieving share gains
New lighter weight Meridian front end loader RCV began shipping in 1H FY16− Market anticipation is high
Improved concrete mixer order rates in Q2; cautious tone remains
Believe long-term concrete mixer dynamics are favorable− Increased construction activity− Recently passed highway bill
(FAST Act)− Fleets continue to age
MOVING THE WORLD AT WORK
Responsible Capital AllocationStrong Free Cash Flow Provides Options
10June 2, 2016Investor Handout
Reinvesting in core business remains preferred option
Return of capital balanced with continued investments– Provides options for the
business– Over $1.0 billion returned to
shareholders over the past four years
– Dividend increased annually since reinstatement in November 2013 201.8
403.3
200.4100.1
50.7
53.1
28.0
$0
$100
$200
$300
$400
$500
FY13 FY14 FY15 FY16YTD*Share Repurchases Dividends
($ m
illio
ns)
Cash Returned to Shareholders
* Data current as of March 31, 2016
Capital Allocation Priorities
MOVING THE WORLD AT WORK
Going Forward with Oshkosh - Expectations
MOVE strategy evolves– Market leadership with a focus
on delighting customers– Margin improvement– Technology drives game-changing
new products– Compete vigorously for business
around the world
Defense to drive growth
– JLTV award is historic, provides strong foundation and visibility into future
– Demand for international M-ATVs
Solid results in 2H FY16 in Access Equipment segment
Continued improvement in Fire & Emergency and Commercial segments
11June 2, 2016Investor Handout
MOVING THE WORLD AT WORK
For informationcontact:
Patrick N. DavidsonVice President, Investor Relations(920) [email protected]
12
Jeffrey D. WattDirector, Investor Relations(920) [email protected]
June 2, 2016Investor Handout 12
MOVING THE WORLD AT WORK
Appendix: Commonly Used Acronyms
13June 2, 2016Investor Handout
ARFF Aircraft Rescue and Firefighting MRAP Mine Resistant Ambush ProtectedAWP Aerial Work Platform MSVS Medium Support Vehicle System (Canada)CapEx Capital Expenditures NOL Net Operating LossCNG Compressed Natural Gas NPD New Product DevelopmentDGE Diesel Gallon Equivalent NRC National Rental CompanyDoD Department of Defense OCO Overseas Contingency OperationsEAME Europe, Africa & Middle East OH OverheadEMD Engineering & Manufacturing Development OI Operating IncomeEPS Diluted Earnings Per Share OOS Oshkosh Operating SystemFHTV Family of Heavy Tactical Vehicles OPEB Other Post-Employment BenefitsFMS Foreign Military Sales PLS Palletized Load SystemFMTV Family of Medium Tactical Vehicles PUC Pierce Ultimate ConfigurationGAAP U.S. Generally Accepted Accounting Principles R&D Research & DevelopmentGAO Government Accountability Office RCV Refuse Collection VehicleHEMTT Heavy Expanded Mobility Tactical Truck RFP Request for ProposalHET Heavy Equipment Transporter ROW Rest of WorldHMMWV High Mobility Multi-Purpose Wheeled Vehicle SMP Standard Military Pattern (Canadian MSVS)IRC Independent Rental Company TACOM Tank-automotive and Armaments CommandIT Information Technology TDP Technical Data PackageJLTV Joint Light Tactical Vehicle TPV Tactical Protector VehicleJPO Joint Program Office TWV Tactical Wheeled VehicleJROC Joint Requirements Oversight Council UCA Undefinitized Contract ActionJUONS Joint Urgent Operational Needs Statement UIK Underbody Improvement Kit (for M-ATV)L-ATV Light Combat Tactical All-Terrain Vehicle UK United KingdomLVSR Logistic Vehicle System Replacement ZR Zero Radius
M-ATV MRAP All-Terrain Vehicle
MOVING THE WORLD AT WORK
Appendix: Expectations for FY16*
Additional expectations Corporate expenses of $140 - $145 million Tax rate of ~ 30% CapEx of ~ $100 million Free Cash Flow** ~ $275 million Assumes share count of ~ 74.5 million
Segment information
Revenues of ~ $5.7 to $6.0 billion Operating income of $305 million to $345 million EPS of $2.30 to $2.70
* Information current as of April 28, 2016** Non-GAAP results. See Appendix for reconciliation to GAAP results.
14
Earnings weighted to second half Seasonality Cautious construction equipment customers Expect higher operating income margins compared
to first half in all segments, except defense segment Expect third quarter will be highest EPS quarter of
the year
Measure Access Equipment Defense Fire &
Emergency Commercial
Sales(billions) $2.8 to $2.95 $1.15 to $1.20 ~ $0.9 ~ $1.0
Operating Income Margin ~10.0% ~ 5.25% ~ 6.0% ~ 7.0%
June 2, 2016Investor Handout
MOVING THE WORLD AT WORK
Appendix: Consolidated Results
Sales impacted by: Lower access equipment volume Higher defense, fire &
emergency and commercial segment sales
EPS impacted by: Lower access equipment
segment results Higher corporate expenses Higher defense, fire &
emergency and commercial segment results
Discrete tax items Lower share count
Q2 Comments
(Dollars in millions, except per share amounts)
Second Quarter
Net Sales $1,524.3 $1,554.2% Change (1.9)% (7.4)%
Operating Income $91.4 $109.7% Change (16.7)% (8.1)%% Margin 6.0% 7.1%
Adjusted EPS $0.76 $0.81*% Change (6.2)% 1.3%
2016 2015
* Non-GAAP results for 2015. See Appendix for reconciliation to GAAP results.
June 2, 2016Investor Handout 15
MOVING THE WORLD AT WORK
Net Sales $754.3 $981.8% Change (23.2)% 13.4%
Operating Income $75.7 $136.9% Change (44.7)% 17.4%% Margin 10.0% 13.9%
Second Quarter
(Dollars in millions)
2016 2015
Appendix: Access Equipment
Sales impacted by: Lower North American volume,
primarily telehandlers
Operating income impacted by: Lower sales volume Challenging pricing Prior year favorable vendor
recovery Unfavorable absorption Lower spending on emissions
standards changes
Backlog up 2% vs. prior year to $665 million
Q2 Comments
June 2, 2016Investor Handout 16
MOVING THE WORLD AT WORK
Appendix: Defense
Sales impacted by: FHTV sales International M-ATV sales
Operating income impacted by: Higher sales volume Favorable product mix
Backlog up 193% vs. prior year to $1.68 billion*
Q2 Comments
Net Sales $297.0 $158.7% Change 87.1% (67.2)%
Operating Income / (Loss) $27.8 $(12.0)
% Change 333.0% (134.6)%% Margin 9.4% (7.5)%
Second Quarter
(Dollars in millions)
2016 2015
June 2, 2016Investor Handout 17
* Recently received international contract for more than 1,000 M-ATVs not included in defense segment March 31, 2016 backlog
MOVING THE WORLD AT WORK
Net Sales $240.4 $202.9% Change 18.5% 30.0%
Operating Income $14.9 $9.0% Change 66.0% 750.1%% Margin 6.2% 4.4%
Second Quarter
(Dollars in millions)
2016 2015
Appendix: Fire & Emergency
Sales impacted by: Higher fire apparatus volume
Operating income impacted by: Higher sales volume Improved operational efficiencies
Backlog up 26% vs. prior year to $903 million
Q2 Comments
June 2, 2016Investor Handout 18
MOVING THE WORLD AT WORK
Appendix: Commercial
Sales impacted by: Higher RCV volume
Operating income impacted by: Improved product mix Higher sales volume
Backlog down 1% vs. prior year to $289 million
Q2 Comments
Net Sales $236.7 $220.9% Change 7.1% 21.2%
Operating Income $17.2 $8.6% Change 99.0% 59.9%% Margin 7.3% 3.9%
Second Quarter
(Dollars in millions)
2016 2015
June 2, 2016Investor Handout 19
MOVING THE WORLD AT WORK
June 2, 2016Investor Handout 20
Appendix: Non-GAAP to GAAP Reconciliation
• The table below presents a reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures (in millions, except per share amounts):
Three Months EndedMarch 31, 2015
Adjusted earnings per share-diluted (non-GAAP) 0.81$ Debt extinguishment costs, net of tax (0.12)
Earnings per share-diluted (GAAP) 0.69$
Fiscal 2016Expectations
Net cash flows provided by operating activities 375.0$ Additions to property, plant and equipment (100.0) Free cash flow 275.0$