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MOVING THE WORLD AT WORK
Oshkosh Corporation (NYSE:OSK)
Jefferies 2015 Global Industrials ConferenceAugust 12, 2015
MOVING THE WORLD AT WORK
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 onCompany exports, translation of foreign sales and purchased materials; the expected level and timing of DoD and internationaldefense 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 U.S. Joint Light Tactical Vehicle 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 andregulations 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 July 30, 2015. All forward-looking statements speak only as of July 30, 2015. 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.
Forward-Looking Statements
2August 12, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
Oshkosh Corporation
Leading provider of specialty vehicles– Moving the World at Work
Nearly 100 years in business; incorporated in 1917
Serial innovator of game changing new products
Market Capitalization(1): $2.9 billion
FY14 Revenue: $6.8 billion
Focused on delivering value to customers and shareholders
3
(1) As of July 31, 2015
Access Equipment Defense Fire & Emergency Commercial
August 12, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
MOVE Strategy Driving Performance… Focuses on drivers that
create highest shareholder value Supports higher margin
targets across non-defense businesses over the cycle
4August 12, 2015Oshkosh Corporation Investor Presentation
…And Beyond FY15
MOVING THE WORLD AT WORK
Recent PerformanceSome Success, Some Near-Term Challenges
Access equipment demand softened beginning in Q3– Actively managing costs and
inventory levels Increased sales, operating income
and backlog in Q3 at Fire & Emergency and Commercial segments
Inflection point in defense earnings in Q4– Re-starting FHTV production– Backlog up 38% at June 30; first
increase since Q4 FY11 International contracts expected
to drive return to growth in FY16 and FY17
5August 12, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
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.
6
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%
August 12, 2015Oshkosh Corporation Investor Presentation
** As of July 30, 2015.
MOVING THE WORLD AT WORK
Continuing to MOVE ForwardOvercoming Short-Term ChallengesExpectations: Solid EPS growth in FY16 and FY17 Defense returning to meaningful growth
– From trough earnings in FY15 Continued recovery in commercial and fire &
emergency segments Overcome mid-cycle dip in access equipment
demand in FY15/FY16– Partially mitigate impact with cost reduction
Resuming meaningful share repurchases – Initially repurchase 2.9 million shares
(current authorization)
7August 12, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
8August 12, 2015Oshkosh Corporation Investor Presentation
Basis for Outlook
MOVING THE WORLD AT WORK
Access Equipment –The Market Leader
MOVE is delivering− Margin improvement remains a
top opportunity− New products driving customer
demand− Product adoption continues globally− Market recovery element
continues to lag
Believe longer-term fundamental business drivers remain intact– Improving residential and non-
residential construction– Replacement demand in Europe– Product adoption in developing markets
Expect 5 – 10% sales decline in FY16
9
Reaching Out – Rising to Every Challenge
August 12, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
Slow U.S. Construction Recovery is Continuing
10
Source: U.S. Census Bureau, July 17, 2015 Source: U.S. Census Bureau, August 3, 2015
U.S. Housing Starts - Current Annual Forecasts (millions)
Date 2015 2016 2017Global Insight May-15 1.08 1.30 1.45Moody's - Slower Recovery Jul-15 1.04 1.20 1.64Portland Cement Association Apr-15 1.18 1.34 1.53Average Analyst Estimate 1.10 1.28 1.54
U.S. Nonresidential Construction (yr/yr Growth) - Current Analyst EstimatesDate 2015 2016 2017
Portland Cement Association Apr-15 8.8% 8.3% 6.3%FMI Source Jun-15 8.0% 6.0% 5.0%Global Insight Jun-15 1.8% 4.0% 2.8%Moody's – Slower Recovery Jul-15 5.3% 6.2% 7.9%Construction Market Data Aug-15 10.4% 7.8% N/A Dodge Data & Analytics Aug-15 11.6% 12.8% N/AAverage Analyst Estimate 7.7% 7.5% 5.5%
Thousands $ MillionsU.S. Non-Residential SpendingHousing Starts
August 12, 2015Oshkosh Corporation Investor Presentation
400
500
600
700
800
900
1,000
1,100
1,200
1,300
Jan‐2010
Jul‐2
010
Jan‐2011
Jul‐2
011
Jan‐2012
Jul‐2
012
Jan‐2013
Jul‐2
013
Jan‐2014
Jul‐2
014
Jan‐2015
450,000
500,000
550,000
600,000
650,000
700,000
Jan‐2010
Jul‐2
010
Jan‐2011
Jul‐2
011
Jan‐2012
Jul‐2
012
Jan‐2013
Jul‐2
013
Jan‐2014
Jul‐2
014
Jan‐2015
MOVING THE WORLD AT WORK
Defense –Returning to Growth with Upside Opportunities
Believe FY15 will be trough year for both revenues and operating income
Secured major contract orders for FHTV recap and FMTV
First year-over-year backlog increase since FY11
Pursuing thousands of international M-ATV unit sales– Broad family of variants– Expect few hundred on contract in FY15– Expect contract for > 1,000 in early
FY16; majority for FY16 delivery– Expect additional contracts for
2,000+ M-ATV’s in FY16 for delivery after FY16
11
Mission Proven – World-Class Performance
August 12, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
August 12, 2015Oshkosh Corporation Investor Presentation 12
MOVING THE WORLD AT WORK
Oshkosh L-ATV is JLTVAnything Else is Something Less
Evaluated as leading JLTV offering entering EMD phase
Tested very well in EMD phase Highly protected, extreme mobility,
affordable Ready for full-rate production today to
meet any threat Growing international interest Expect DOD contract decision in
September 2015
August 12, 2015Oshkosh Corporation Investor Presentation 13
MOVING THE WORLD AT WORK
Fire & Emergency –Operational Improvements Leading the Way
Continuing to execute operational efficiency roadmap− Completed assembly line changes
Positive response to recent new product launches– Revolutionary Ascendant™ two
axle aerial ladder vehicle
Modest market growth expectedin North America in FY15– Strong orders at Pierce led to
share gains Additional international success− ARFF orders in Asia, Australia
and Latin America
14
Recently Launched New Products Driving Customer Interest
August 12, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
Commercial –Progress Continues
MOVE investments continue Solid North American concrete
mixer market recovery over last several years− Driven by slowly improving
housing market− Experienced order slowdown in
Q3 FY15
Double digit sales growth in FY15 led by RCV products– Growing RCV share in a slowly improving
market Split Body Rear Loader and Automated
Side Loader RCV models generating incremental demand
Meridian Lightweight Front End Loader commences production in Q2 FY16
15
North American Market Leader Split Body Rear Loader
August 12, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
Driving to the Future
16August 12, 2015Oshkosh Corporation Investor Presentation
Driving to the Future
MOVING THE WORLD AT WORK
What to Expect from Oshkosh?
MOVE strategy evolves– Margin improvement in non-
Defense segments– Launch game-changing new
products– Compete vigorously for business
around the world
Target defense contract awards
Maintain strong customer focus
Increase industry-leading quality to higher level
Drive shareholder value
17August 12, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
What Are Our Performance Targets? Continued improvement
Execute effectively to deliver positive FY16/FY17 outlook
Continue operating income margin expansion – Target 16% – 17% at Access Equipment– Initially target 10% at other segments
Prudent capital allocation– Deploy cash with crocodile patience Reinvest in business Opportunistic share repurchases
– Target annual dividend increases Sustain talent and process
improvement to outperform with Oshkosh Operating System
18
* Non-GAAP results. See Appendix for reconciliation to GAAP results.
August 12, 2015Oshkosh Corporation Investor Presentation
5.0%
7.0%7.5% 6.5% – 7.0%
10.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
FY12 FY13 FY14 FY15E Target
Consolidated Adjusted Operating Income Margins*
MOVING THE WORLD AT WORK
Oshkosh Corporation Profile - FY15 YTD
Source: Oshkosh Corporation Form 10-Q for quarter ended June 30, 2015
19Oshkosh Corporation Investor Presentation August 12, 2015
58%
14%
12%
16%
Revenue by Segment
Access Equipment Defense Fire & Emergency Commercial
79%
5%8%
8%
Revenue by Geography
United States Other NA EAME Rest of World
Continuing to evolve to a more global industrial− Defense expected to contribute to global footprint
MOVING THE WORLD AT WORK
Solid EPS growth in FY16 and FY17 Defense returning to meaningful growth
– From trough earnings in FY15 Continued recovery in commercial and fire and
emergency segments Overcome mid-cycle dip in access equipment
demand in FY15/FY16– Partially mitigate impact with cost reduction
Resuming meaningful share repurchases – Initially repurchase 2.9 million shares
(current authorization)
20
Continuing to MOVE ForwardOvercoming Short-Term ChallengesExpectations:
August 12, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
For informationcontact:
Patrick N. DavidsonVice President, Investor Relations(920) [email protected]
21
Jeffrey D. WattDirector, Investor Relations(920) [email protected]
August 12, 2015Oshkosh Corporation Investor Presentation 21
MOVING THE WORLD AT WORK
22
Appendix: Commonly Used AcronymsARFF Aircraft Rescue and Firefighting MECV Modernized Expanded Capability VehicleAWP Aerial Work Platform MRAP Mine Resistant Ambush ProtectedCapEx Capital Expenditures MSVS Medium Support Vehicle System (Canada)CNG Compressed Natural Gas NOL Net Operating LossDGE Diesel Gallon Equivalent NPD New Product DevelopmentDoD Department of Defense NRC National Rental CompanyEAME 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 & DevelopmentHEMTT Heavy Expanded Mobility Tactical Truck RCV Refuse Collection VehicleHET Heavy Equipment Transporter RFP Request for ProposalHMMWV High Mobility Multi-Purpose Wheeled Vehicle ROW Rest of WorldIRC Independent Rental Company SMP Standard Military Pattern (Canadian MSVS)IT Information Technology TACOM Tank-automotive and Armaments CommandJLTV Joint Light Tactical Vehicle TDP Technical Data PackageJPO Joint Program Office TPV Tactical Protector VehicleJROC Joint Requirements Oversight Council TWV Tactical Wheeled VehicleJUONS Joint Urgent Operational Needs Statement UCA Undefinitized Contract ActionL-ATV Light Combat Tactical All-Terrain Vehicle UIK Underbody Improvement Kit (for M-ATV)LVSR Logistic Vehicle System Replacement UK United KingdomM-ATV MRAP All-Terrain Vehicle ZR Zero Radius
August 12, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
August 12, 2015Oshkosh Corporation Investor Presentation 23
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 2015Expectations
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
MOVING THE WORLD AT WORK
August 12, 2015Oshkosh Corporation Investor Presentation 24
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 :
Fiscal Year EndedSeptember 30,
2012 2013 2014 2015E
Consolidated operating income margins (non-GAAP) 5.0% 7.0% 7.5% 7.0%Union contract ratification costs - -0.1% - -Performance share valuation adjustment -0.1% - - -Pension and OPEB curtailment gain - - 0.1% -Tender offer and proxy contest costs -0.1% -0.2% - -Impairment charge - -0.1% - -Contract pricing adjustment for OPEB costs - - -0.2% -Consolidated operating income margins (GAAP) 4.8% 6.6% 7.4% 7.0%