Q4 2014 Earnings Oshkosh

MOVING THE WORLD AT WORK

Oshkosh CorporationFourth Quarter Fiscal 2014

October 31, 2014

Charles L. SzewsChief Executive Officer

Wilson R. JonesPresident and Chief Operating Officer

David M. SagehornExecutive Vice President and Chief Financial Officer

Patrick N. DavidsonVice President, Investor Relations


Forward-Looking StatementsThis 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 strength of emerging market growth and projected adoption rates of work at height machinery; 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 uncertainDoD 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. JLTV production contract award and international defense contract awards; 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 facilitiesconsolidation 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; 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 foreign currency fluctuations and compliance with the Foreign Corrupt Practices Act; the Company’s ability to comply with complex laws and regulations applicable to U.S. government contractors; the impact of severe weather or natural disasters that may affect the Company, its suppliers or its customers; cyber security 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.

October 31, 2014OSK Fourth Quarter 2014 Earnings Call 2


On the MOVE! FY14 adjusted EPS** of $3.62, above high end of

Company’s initial guidance FY15 adjusted EPS** estimate range of $4.00 - $4.25 within Company’s

2012 Analyst Day EPS target range for FY15 Non-Defense markets continue to recover,

generally slower than 2012 Analyst Day expectations Oshkosh O, V, & E initiatives expected to meet or exceed

Analyst Day targets for FY15 Leveraging balance

sheet strength Defense segment offers

biggest upside opportunities


$0.00

$0.50$1.00

$1.50$2.00

$2.50$3.00

$3.50$4.00

$4.50

FY12* FY13* FY14 FY15F

Adjusted EPS**

* Continuing operations only.** Non-GAAP results. See Appendix for reconciliation to GAAP results.


Solid Q4 Performance to Close Out FY14

Adjusted results above both prior year and high end of most recent expectations– Led by continued strong access

equipment segment performance Repurchased 5.2 million shares

for $250 million Raising quarterly cash dividend

to $0.17 per share Announcing FY15 adjusted EPS**

estimate range of $4.00 to $4.25N

et S

ales

(bill

ions

)

Adjusted EPS**

OSK Fiscal Q4 Performance


$1.7 $1.7 $0.96

$0.49

$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

FY14 FY13*Net Sales Adjusted EPS**

* Continuing operations only** Non-GAAP results. See Appendix for reconciliation to GAAP results.


MOVE Impact Evident in Strong Full Year Results Operating income margins

increased in all non-Defense segments– Led by access equipment

segment Strong new product launches;

more to come Advantageous capital allocation

– Repurchased 8.3 million shares for $403 million

– Reinstated quarterly dividend OOS activities have driven

improvement Work remaining at Pierce to

improve operating income margins

Net

Sal

es(b

illio

ns)

Adjusted EPS**

OSK Full Year Performance

* Continuing operations only** Non-GAAP results. See Appendix for reconciliation to GAAP results.

$6.8$7.7

$3.62 $3.74

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

FY14 FY13*Net Sales Adjusted EPS**

5October 31, 2014OSK Fourth Quarter 2014 Earnings Call


FY15 Targets

On Track to Achieve in FY15…

(1) Compared with FY12 expectations as of September 2012 Analyst Day.(2) Net of investment costs and compared with consolidated FY11 operating income margins.

Initiative

…Bottom Line Results for Shareholders

FY15Estimate

6

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

October 31, 2014OSK Fourth Quarter 2014 Earnings Call


Defense Successfully concluded JLTV EMD

testing– Expect formal Production RFP to be

released in November

Continue to pursue international programs– Additional M-ATV sales and

Canadian MSVS

Re-purposed production facilities– Announced additional workforce reductions

Expect operating loss in FY15 Q1 & Q2; marginally profitable for year– FHTV production break while new contract

is finalized

– Investing in pursuit of JLTV and international contract awards



Access Equipment

MOVE delivered in FY14– Exciting new products– Strong incremental margins– Record revenues, operating income and

operating income margin

Continued growth expected in FY15– Moderate growth in North America– Mixed outlook in other regions Recent European economic slowdown muting

impact of aged fleets and growing UK market

Middle East strong / Latin America softer

Pacific Rim expected to grow; slow recoveryin Australia

Increased market competitiveness



Fire & Emergency

Stepped back to better execute business improvement roadmap– Expect FY15 Q1 operating loss

International progress continues Strong orders for new Enforcer and

Saber chassis North American fire truck demand

remains soft– Slow market growth expected

in FY15



Commercial Solid improvement in FY14

– Strong yr/yr concrete mixer sales– Early stage investments in MOVE

initiatives began to impact performance

Expect continued market recovery in FY15– Modest U.S. housing market

growth expected to drive mixer market

– Slow growth in refuse collection vehicle market

Success with split-bin and automated units



Consolidated Results

Sales impacted by:‒ Lower defense segment sales

+ Higher access equipment and commercial segment sales

EPS impacted by:+ Significantly higher access

equipment segment operating income

+ Lower tax rate due to favorable settlement of tax audits

+ Impact of FY14 share repurchases

‒ Lower defense segment operating income

Comments

(Dollars in millions, except per share amounts)

Fourth Quarter

Net Sales $1,667.7 $1,726.5% Change (3.4)% (15.8)%

Adjusted Operating Income** $116.9 $78.0

% Change 49.7% (28.4)%% Margin 7.0% 4.5%

Adjusted EPS** $0.96 $0.49% Change 95.9% (23.4)%

2014 2013*

* Continuing operations only.

** Non-GAAP results. See Appendix for reconciliation to GAAP results.October 31, 2014OSK Fourth Quarter 2014 Earnings Call 11


Expectations for FY15

Additional expectations Corporate expenses of $140 - $145 million Refinancing of 8.5% Sr. Notes Tax rate of ~31% CapEx of ~$150 million Free cash flow* ~$200 million Assumes share count of ~80 million

Segment information

Measure Access Equipment Defense Fire &

Emergency Commercial

Sales(billions) $3.7 - $3.8 ~$1.0 ~$0.80 ~$1.0

Operating Income Margin ~15.0% Slightly above

break even ~4.25% ~6.5%

Revenues of $6.5 billion to $6.6 billion Operating income of $510 million to $540 million Adjusted EPS* of $4.00 to $4.25



Q1 Commentary Expect EPS lower by ~2/3 vs. Q1 FY14 EPS

Large sales decline and higher NPD spending in defense segment

Adverse mix and NPD timing in access equipment segment Lower sales volume in fire & emergency segment

Expect significant cash usage driven byseasonal factors


Executing the MOVE MOVE has driven results and continues to evolve Management completely focused on achieving

adjusted EPS* of $4.00 - $4.25 for FY15 Within 2012 Analyst Day target range of $4.00 - $4.50

Positioning Oshkosh to sustain earnings growth in FY16and beyond

Planning Analyst Day in early September 2015




For informationcontact:

Patrick N. DavidsonVice President, Investor Relations(920) [email protected]

Jeffrey D. WattDirector, Investor Relations(920) [email protected]



Net Sales $932.7 $780.6% Change 19.5%* 8.9%

AdjustedOperating Income $127.4 $90.2**

% Change 41.3% 51.7%% Margin 13.7% 11.6%

Fourth Quarter

(Dollars in millions)

2014 2013

Appendix: Access Equipment

Sales impacted by: Continued recovery of global

market Prior year sales of U.S. military

telehandlers Operating income impacted by:

Higher sales volume Product and process cost

reductions Higher NPD and operating costs

Backlog up 4.5% vs. prior year to $384 million

Comments


* Growth of 22.4% excluding military telehandlers.

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


Appendix: Defense

Sales impacted by: Lower sales to U.S. DoD Prior year international M-ATV

sales Prior year JLTV test unit sales

Operating income impacted by: Lower sales volume Favorable warranty experience Lower engineering and operating

costs

Backlog down 57.6%vs. prior year to $780 million

Comments

Net Sales $288.1 $513.8% Change (43.9)% (46.1)%

Adjusted Operating Income* $1.8 $15.0

% Change (88.1)% (76.1)%% Margin 0.6% 2.9%

Fourth Quarter


2014 2013




Net Sales $214.9 $232.0% Change (7.4)% 6.6%

Operating Income $12.5 $9.2% Change 35.3% (23.7)%% Margin 5.8% 4.0%

Fourth Quarter


2014 2013

Appendix: Fire & Emergency

Sales impacted by: Production delays Prior year large international

deliveries

Operating income impacted by: Favorable product mix Lower operating expenses Lower sales volume


Comments



Appendix: Commercial

Sales impacted by: Higher concrete mixer volume

Operating income impacted by: Higher sales volume


Comments

Net Sales $243.7 $209.4% Change 16.4% 15.4%

Operating Income $18.4 $15.7% Change 17.3% 70.9%% Margin 7.6% 7.5%

Fourth Quarter


2014 2013



Appendix: Commonly Used Acronyms

19October 31, 2014OSK Fourth Quarter 2014 Earnings Call

ARFF 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


Appendix: Non-GAAP to GAAP Reconciliation

• The tables below present a reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures (in millions):


2014 2013

Access equipment segment sales excluding military (non-GAAP) 932.7$ 761.9$ Military telehandler sales - 18.7 Access equipment segment sales (GAAP) 932.7$ 780.6$

Adjusted access equipment segment operating income (non-GAAP) 127.4$ 90.2$ Intangible asset impairment charge - (9.0) Access equipment segment operating income (GAAP) 127.4$ 81.2$

Adjusted defense segment operating income (non-GAAP) 1.8$ 15.0$ Pension curtailment and settlement loss (3.8) - Union contract ratification costs - (3.8) Defense segment operating income (loss) (GAAP) (2.0)$ 11.2$

Adjusted operating income (non-GAAP) 116.9$ 78.0$ Pension curtailment and settlement loss (3.8) - Intangible asset impairment charge - (9.0) Union contract ratification costs - (3.8) Operating income (GAAP) 113.1$ 65.2$

Three Months EndedSeptember 30,



• The tables below present a reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures:


2014 2013 2014 2013 2012

Adjusted earnings per share from continuing operations-diluted (non-GAAP) 0.96$ 0.49$ 3.62$ 3.74$ 2.30$ Reduction of valuation allowance on net operating loss carryforward - - 0.14 - - Debt extinguishment costs, net of tax - - (0.08) - - Contract pricing adjustment for OPEB costs, net of tax - - (0.08) - - OPEB curtailment gain, net of tax - - 0.07 - - Pension curtailment and settlement loss, net of tax (0.03) - (0.06) - (0.02) Tender offer and proxy contest costs, net of tax - - - (0.12) (0.05) Intangible asset impairment charge, net of tax - (0.06) - (0.06) - Union contract ratification costs, net of tax - (0.03) - (0.03) - Performance share valuation adjustment, net of tax - - - - (0.05) Discrete tax benefits - - - - 0.49 Earnings per share from continuing operations-diluted (GAAP) 0.93$ 0.40$ 3.61$ 3.53$ 2.67$

Fiscal Year EndedSeptember 30,

Three Months EndedSeptember 30,



• The tables below present 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 earnings per share from continuing operations-diluted (non-GAAP) 4.00$ 4.25$ Debt extinguishment costs, net of tax (0.11) (0.11)Earnings per share from continuing operations-diluted (GAAP) 3.89$ 4.14$

Fiscal 2015 Expectations

Fiscal 2015Expectations

Net cash flows provided by operating activities 368.0$ Additions to property, plant and equipment (150.0) Net additions to equipment held for rental (18.0) Free cash flow 200.0$

Q4 2014 Earnings Oshkosh

Investor Relations

Transcript of Q4 2014 Earnings Oshkosh