MOVING THE WORLD AT WORK
Oshkosh Corporation (NYSE:OSK)
Stifel 2015 Industrials ConferenceJune 16, 2015
MOVING THE WORLD AT WORK
Forward-Looking Statements
2June 16, 2015Oshkosh Corporation Investor Presentation
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,” “target,” “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 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 U.S. Joint Light Tactical Vehicle 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 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; 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; the impact of severe weather or natural disasters that may affect the Company, its suppliers or its customers; 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, 2015. All forward-looking statements speak only as of April 28, 2015 except as specifically updated herein. 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
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): $4.2 billion
FY14 Revenue: $6.8 billion
Focused on delivering value to customers and shareholders
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(1) As of May 26, 2015
Access Equipment Defense Fire & Emergency Commercial
June 16, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
Oshkosh Corporation Profile – FY14
Source: Oshkosh Corporation 2014 Annual Report
4Oshkosh Corporation Investor Presentation June 16, 2015
51%
25%
11%
13%
Revenue by Segment
Access Equipment Defense Fire & Emergency Commercial
77%
5%10%
8%
Revenue by Geography
United States Other NA EAME Rest of World
Non-Defense Segment Revenues and Operating Income Both Grew in FY14
MOVING THE WORLD AT WORK
Expect Solid Performance in FY15– Strong customer sentiment– Updating full year adjusted EPS* estimate range to $3.75 to $4.00
Positive Outlook Beyond FY15– Additional market recovery opportunities in
non-defense segments– Significant upside opportunities in defense– MOVE to deliver margin expansion and growth
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A Positive Outlook for OSK
June 16, 2015Oshkosh Corporation Investor Presentation
* Non-GAAP results. See Appendix for reconciliation to GAAP results.
MOVING THE WORLD AT WORK
Basis for Positive Outlook
6June 16, 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
7June 16, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
Access Equipment –The Market Leader
MOVE delivered in FY14– Exciting new products– Strong incremental margins– Record revenues, operating
income and operating income margin
Expect continued growth in FY15– Moderate growth in North America
and Europe– Mixed outlook in other regions Strong new product launches
during the year
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Reaching Out – Rising to Every Challenge
June 16, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
Slow U.S. Construction Recovery is Continuing
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Source: U.S. Census Bureau, May 19, 2015 Source: U.S. Census Bureau, June 1, 2015
U.S. Housing Starts - Current Annual Forecasts (millions)
Date 2014 2015 2016Global Insight May-15 1.00 1.08 1.30Moody's - Slower Recovery May-15 1.00 1.11 1.42Portland Cement Association Apr-15 1.00 1.18 1.34Average Analyst Estimate 1.00 1.12 1.35
U.S. Nonresidential Construction (yr/yr Growth) - Current Analyst EstimatesDate 2014 2015 2016
Portland Cement Association Apr-15 8.2% 8.8% 8.3%FMI Source Mar-15 6.0% 8.0% 7.0%Global Insight Mar-15 2.8% 2.2% 3.6%Moody's – Slower Recovery May-15 6.9% 3.6% 5.2%Construction Market Data Mar-15 3.9% 8.2% 8.6%Dodge Data & Analytics Mar-15 13.5% 10.9% 13.0%Average Analyst Estimate 6.9% 7.0% 7.6%
Thousands $ MillionsU.S. Non-Residential SpendingHousing Starts
June 16, 2015Oshkosh Corporation Investor Presentation
400
500
600
700
800
900
1,000
1,100
1,200
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
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
Operating Income Margin Expansion Remains a Priority
Expect biggest impact from optimize cost and value innovation initiatives still to come
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10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
FY14 FY15E Target
(Ope
ratin
g In
com
e M
argi
n %
)
16%
17%
~ 14.5% 14.3%
ACCESS EQUIPMENT
June 16, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
Defense –Reduced Cost Structure with Upside Opportunities
Believe FY15 will be trough year for both revenues and operating income
Submitted proposal for JLTV program in February– Expect decision on winning bidder
in August or September 2015 Canada MSVS program award
decision expected in June 2015
Continuing pursuit of sales of thousands of M-ATVs– International– Reset opportunities in U.S.
Generally favorable FY16 budget funding requests for our programs
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Mission Proven – World-Class Performance
June 16, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
Fire & Emergency –Operational Improvements Leading to Bright Future
Continuing to execute operational efficiency roadmap− More work to be done
Positive response to recent new product launches– Enforcer and Saber chassis– Revolutionary Ascendant™ two
axle aerial ladder vehicle
Modest market growth expectedin North America in FY15– Recently announced 3% price
increase Additional international success− ARFF orders in Asia, Australia
and Latin America
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Recently Launched New Products Driving Customer Interest
June 16, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
Operating Income Margin Expansion Remains a Priority
Margin expansion behind schedule, but improvement roadmap is solid
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0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
FY14 FY15E Target
(Ope
ratin
g In
com
e M
argi
n %
)
10%+
~ 4.25% 3.5%
FIRE & EMERGENCY
June 16, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
Commercial –Progress Continues
Solid North American concrete mixer market recovery over last several years− Driven by slowly improving
housing market− Strong U.S. dollar creating some
drag for multinational concrete mixer customers
RCV market expected to grow in FY15– Grew modestly in FY14
Split-bin and automated RCV models generating incremental demand
MOVE investments continue
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North American Market Leader Split Body Rear Loaders
June 16, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
Operating Income Margin Expansion Remains a Priority
Optimize cost initiatives continue Absorption benefits accelerate in market recovery
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0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
FY14 FY15E Target
(Ope
ratin
g In
com
e M
argi
n %
)
10%+
~ 6.5% 6.2%
COMMERCIAL
June 16, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
Driving to FY15 MOVE Targets and Beyond
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MOVING THE WORLD AT WORK
What to Expect from Oshkosh in FY15?
Deliver MOVE strategy– Margin improvement in all 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
17June 16, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
And Beyond FY15? Continued improvement
Execute effectively to deliver positive near-term outlook
Continue operating income margin expansion – Target 16 – 17% at Access Equipment– Initially target 10% at other segments
Prudent capital allocation– Target annual dividend increases– Begin building cash; deploy with
crocodile patience Sustain talent and process
improvement to outperform with Oshkosh Operating System
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7.0% 7.5% ~ 8.0%
10.0%+
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2013 2014 2015E Target
OSK Consolidated Adjusted Operating Income Margin *
* Non-GAAP results. See Appendix for reconciliation to GAAP results.
June 16, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
For informationcontact:
Patrick N. DavidsonVice President, Investor Relations(920) [email protected]
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Jeffrey D. WattDirector, Investor Relations(920) [email protected]
June 16, 2015Oshkosh Corporation Investor Presentation 19
MOVING THE WORLD AT WORK
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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
June 16, 2015Oshkosh Corporation Investor Presentation
MOVING THE WORLD AT WORK
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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 HighAdjusted earnings per share - diluted (non-GAAP) 3.75$ 4.00$ 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) 3.66$ 3.91$
Fiscal 2015 Expectations
MOVING THE WORLD AT WORK
June 16, 2015Oshkosh Corporation Investor Presentation 22
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:
2013 2014 2015E
Consolidated operating income margins (non-GAAP) 7.0% 7.5% 8.0%Union contract ratification costs -0.1% - - Pension curtailment and settlement loss - -0.1% - OPEB curtailment gain - 0.2% - Tender offer and proxy contest costs -0.2% - - Impairment charge -0.1% - - Contract pricing adjustment for OPEB costs - -0.2% - Consolidated operating income margins (GAAP) 6.6% 7.4% 8.0%
Fiscal Year EndedSeptember 30,