2015 ASM Presentation FINAL - s2.q4cdn.coms2.q4cdn.com/.../2015/2015-ASM-Presentation-FINAL... · 2015 Annual Shareholders ... expected level and timing of DoD and international defense

MOVING THE WORLD AT WORK

Oshkosh Corporation(NYSE:OSK)

2015 Annual Shareholders’ MeetingFebruary 3, 2015


Forward-Looking Statements

February 3, 20152015 Annual Shareholders' Meeting 2

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 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 facilitiesexpansion, consolidation and alignment, including the amounts of related costs and charges and that anticipated cost savings maynot be achieved; global economic uncertainty, which could lead to additional impairment charges related to many of the Company’sintangible 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 January 27, 2015. 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.


February 3, 20152015 Annual Shareholders' Meeting

2015 Annual Shareholders’ MeetingCharlie Szews - Chief Executive Officer

February 3, 2015MOVE: Enjoy the Ride

3


Outstanding Total Shareholder Returns Compared with “The Outsiders”

Source: NYSE March 29,1996 to December 31, 2014


0

500

1,000

1,500

2,000

2,500

3,000

3,500

Mar

-96

Sep-

96M

ar-9

7Se

p-97

Mar

-98

Sep-

98M

ar-9

9Se

p-99

Mar

-00

Sep-

00M

ar-0

1Se

p-01

Mar

-02

Sep-

02M

ar-0

3Se

p-03

Mar

-04

Sep-

04M

ar-0

5Se

p-05

Mar

-06

Sep-

06M

ar-0

7Se

p-07

Mar

-08

Sep-

08M

ar-0

9Se

p-09

Mar

-10

Sep-

10M

ar-1

1Se

p-11

Mar

-12

Sep-

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ar-1

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p-13

Mar

-14

Sep-

14

Tota

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urn

(%)

OSKS&P 500BRK.AGDTDY


Reflections on Fiscal 2014

February 3, 20152015 Annual Shareholders’ Meeting 5


MOVE Impact Evident in Strong Full Year FY14 Results FY14 adjusted EPS* of $3.62,

above high end of Company’s initial estimates

Non-Defense markets continued to recover

Strong new product launches Advantageous capital allocation

– Repurchased 8.3 million shares for $403 million

– Raised quarterly dividend in October 2014

Oshkosh Operating System improving customer satisfaction


$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 FY13Net Sales Adjusted EPS*

OSK Full Year Performance

Net

Sal

es(b

illio

ns)

Adjusted EPS*

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


Non-Defense Segment Sales Growth

Consolidated Net Sales($ billions)

Despite challenges from lower defense spending…

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

Net SalesFY12 FY13 FY14


Non-Defense Segment Sales($ billions)

$0.0

$2.0

$4.0

$6.0

Net SalesFY12 FY13 FY14

…we have grown non-defensesales at a solid pace...


Non-Defense Operating Income Growth



Consolidated Adjusted Operating Income*

($ millions)

$0

$100

$200

$300

$400

$500

$600

$700

Non-Defense Operating Income*FY12 FY13 FY14

Non-Defense Segment Operating Income*

($ millions)

…and grown non-defense operating income even faster

$0

$100

$200

$300

$400

$500

$600

$700

Adjusted Operating Income**FY12 FY13 FY14


Capital Allocation Contributing to TSR (1)

Aggressively retiring shares at favorable prices; $605 million allocated to share repurchases in FY13 and FY14

Reinstated dividend with > 1% yield in December 2013; announced 13% increase to dividend in October 2014

(1) Total shareholder returnP = Projected


70

75

80

85

90

95

09/30/12 09/30/13 09/30/14

# Outstanding Shares

(Sha

res in m

illions)

>12% Reduction

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

FY13 FY14 FY15(P)

Annualized Dividend Payment

13% Increase

9


Our Company –Strong Brands, Market Leaders



Access Equipment –The Market Leader 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



Defense – Reduced Cost Structure with Upside Opportunities Implemented necessary operations

changes to match lower demand Canada MSVS program award

decision expected by July 2015 $30 billion JLTV program award

decision expected in September 2015– DoD projects initial 8 year contract over

$9 billion

Continuing pursuit of sales of thousands of M-ATVs– Middle East and North Africa

– Eastern Europe

– Reset opportunities in U.S.



Fire & Emergency – Operational Improvements Leading to Bright Future

Stepped back to better execute business improvement roadmap– Expect margins to improve

throughout FY15

International progress continues– Manchester, UK ARFF deliveries

Strong orders for new Enforcer and Saber chassis

North American fire truck demand remains soft– Slow market growth expected

in FY15


Saber Chassis

Enforcer Chassis


Commercial –Progress Continues 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



Driving to FY15 MOVE Targets and Beyond



FY15 Target

FY15 MOVE ScorecardOn Track to Achieve FY15 Adjusted EPS Target Range

(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



16


What to Expect from Oshkosh in FY15 Deliver MOVE strategy

– FY15 adjusted EPS* estimate rangeof $4.00 - $4.25

– 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




What to Expect from Oshkosh Beyond FY15?“More of Same”

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


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

Consolidated Adjusted Operating Income Margin *



Our Commitment to Shareholders



Sustain momentum and focus on improving– Customer satisfaction– ROIC– Shareholder returns Prudent capital allocation as disciples of “The Outsiders” “Enjoy the Ride”


Our Commitment to Shareholders

20


For informationcontact:

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

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




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



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:

2014 2013

Adjusted earnings per share from continuing operations-diluted (non-GAAP) 3.62$ 3.74$ 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 (0.06) - Tender offer and proxy contest costs, net of tax - (0.12) Intangible asset impairment charge, net of tax - (0.06) Union contract ratification costs, net of tax - (0.03) Earnings per share from continuing operations-diluted (GAAP) 3.61$ 3.53$

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)OPEB curtailment gain, net of tax 0.02 0.02Earnings per share from continuing operations-diluted (GAAP) 3.91$ 4.16$

Fiscal 2015 Expectations

Fiscal Year EndedSeptember 30,




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


2012 2013 2014 2015E

Adjusted operating income (non-GAAP) $ 404.7 $ 534.8 $ 512.2 $ 525.0 Union contract ratification costs - (3.8) - -Performance share valuation adjustment (7.0) - - -Pension curtailment and settlement loss (3.4) - (8.2) -OPEB curtailment gain - - 10.0 3.4 Tender offer and proxy contest costs (6.6) (16.3) - -Intangible asset impairment charge - (9.0) - -Contract pricing adjustment for OPEB costs - - (10.7) -Operating income (GAAP) $ 387.7 $ 505.7 $ 503.3 $ 528.4




• 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% - - Intangible asset impairment charge -0.1% - - Contract pricing adjustment for OPEB costs - -0.2% - Consolidated operating income margins (GAAP) 6.6% 7.4% 8.0%





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

2012 2013 2014

Non-Defense Segment Sales 4,385.1$ 4,680.1$ 5,128.9$ Defense Segment Sales 3,950.5 3,049.7 1,724.5 Intersegment eliminations (194.5) (64.7) (45.2) Consolidated Net Sales 8,141.1$ 7,665.1$ 6,808.2$

2012 2013 2014

Non-Defense Segment Operating Income 270.1$ 444.7$ 581.6$ Defense Segment Operating Income 236.5 224.9 76.4 Corporate (119.1) (163.9) (154.7) Intersegment eliminations 0.2 - - Consolidated Operating Income 387.7$ 505.7$ 503.3$



2015 ASM Presentation FINAL - s2.q4cdn.coms2.q4cdn.com/.../2015/2015-ASM-Presentation-FINAL... · 2015 Annual Shareholders ... expected level and timing of DoD and international defense

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