08-13-13 jefferies conference presentation final · • adjusted corporate expenses ~$145 million...

OSK Investor Slides August 2013

Oshkosh Corporation

Jefferies 2013 Industrials ConferenceAugust 2013

David M. SagehornExecutive Vice President andChief Financial Officer

Patrick N. DavidsonVice President of Investor Relations


Forward-Looking Statements

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, withoutlimitation, 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, areforward-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, especially in the current environment where there are conflicting signs regarding the global economic outlook and the ability of the U.S. government to resolve budgetary and debt issues; the expected level and timing of the DoD 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 the significant projected decrease in sales levels in the defense segment; the Company’s ability to increase prices to raise margins or offset higher input costs; increasing commodityand other raw material costs, particularly in a sustained economic recovery; risks related to facilities consolidation and alignment, including the amounts of related costs and charges and that anticipated cost savings may not be achieved; the duration of the ongoing global economic weakness, 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 delaysarising 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; and risks related to the Company’s ability to successfully execute on itsstrategic 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, 2013.

All forward-looking statements speak only as of July 30, 2013. 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.

2


Oshkosh Corporation – (NYSE: OSK)

• Four Strong Segments

• Employees (2): ~12,200

(1) Non-GAAP results. See Appendix for reconciliation to GAAP results.(2) As of August 1, 2013.

3

• Market Cap (2): $3.9B

• Incorporated in 1917

Q3 YTD Performance FY13 FY12 % Change Revenue $5.94B $6.09B (2.5%)

Solid non-defense growth largely offset anticipated defense decline

Adjusted EPS (1) $3.23 $1.66 94.6% Strong growth despite lower defense revenue

Free Cash Flow (1) $216M $38M 568.0%Consistent generator of strong FCF


FY15 Targets

MOVE – The Right StrategySummary of Primary Opportunities – FY12 to FY15

• Focuses on drivers that create highest shareholder value

• Expected to drive higher incremental margins across non-Defense businesses over cycle

(1) Expected benefits of market recovery captured in financial estimates vs. September 2012 Analyst Day estimate of FY12. Does notinclude benefits of other MOVE initiatives.

(2) Net of investment costs and compared with consolidated FY11 operating income margins.(3) Compared with FY12.

Initiative

4


Poised to Deliver ResultsExpect to overcome effects of defense downturn

• MOVE strategy expected to deliver higher margins throughout cycle• Strong Q3 FY13 revenue and income performance• Oshkosh processes and team support execution of MOVE

– Powered by Oshkosh Operating System

Industry Leading Brands (1)

Access Equipment #1 Global

Fire Apparatus #1 Global

Airport Products #1 Global

Defense TWV (2) #1 Global

Concrete Mixers #1 Americas

Refuse Collection #1 Americas

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

(1) Based on Company estimates.(2) Oshkosh Defense is the leading supplier of heavy and medium tactical

wheeled vehicles for the U.S. Armed Services.

5


The Access Equipment Advantage

JLG is positioned for sustained industry leading performance

Global Leader in Access Equipment

Industry Leading

Innovation

Superior Product Range

Full Spectrum Parts, Service, and Support

Flexible Manufacturing

and Supply Chain

Global Market Presence

6


North American Rental Companies Refreshing Their Fleets, Increasing Market Penetration

Total Construction Spending(Y-O-Y % Change)

NA Rental Equipment Access - Fleet Age(AWP and TMH)

NA Rental Equipment Company Fleet Utilization NA Rental Equipment Company CapEx (Y-O-Y % Change)

Source: IHS Global data/projections, August, 2013

Based on International Rental News/Dan Kaplan sample of medium to large NA rental equipment companies (United Rental, RSC, H&E, HERC).

Based on International Rental News/Dan Kaplan sample of medium to large NA rental equipment companies (United Rental, RSC, HERC, Ameco, Neff).

(% C

hang

e)(%

Tim

e U

tiliz

atio

n)

(% C

hang

e)

Source: Rouse Rental Report. Calendar year-end data for 2009-12

40

45

50

55

60

2009 2010 2011 2012

Age (months)

‐90

‐60

‐30

0

30

60

90

120

150

2004 2005 2006 2007 2008 2009 2010 2011 2012

CapEx

(Age

in M

onth

s)

7

50

55

60

65

70

75

1Q'102Q

'103Q

'104Q

'101Q

'112Q

'113Q

'114Q

'111Q

'122Q

'123Q

'124Q

'121Q

'132Q

'13

Ind. Avg.

‐20

‐10

0

10

20

2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E

United States Canada


Positive North America Leading Indicators

Source: Rouse Asset Services, July 2013.

AWP – Articulating Boom 52.0

Average Age(in months)

Recent Used Equipment Value Trends(OLV)

U.S. Housing Starts

Seasonally Adjusted Rate 2013 2012 Change

June 836,000 757,000 +10.4%Source: U.S. Census Bureau, July 2013.

AWP – Scissor Lifts 56.1

AWP – Telescopic Boom 55.1

39.7%

43.4%

35.0

40.0

45.0

OLV

(% o

f Cos

t)

38.4%

43.4%

35.0

40.0

45.0

OLV

(% o

f Cos

t)

30.9%31.2%

30.0

32.5

35.0

OLV

(% o

f Cos

t)

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The Oshkosh Defense Advantage

Defense Engineering & Product

Development

Scalable Manufacturing & Operations

Vertical Integration of Specialized

Components

Defense Program

Management

Vehicle Fleet Modernization

Service, Lifecycle

Sustainment

Defense industry expertise that leverages thefull capabilities of Oshkosh Corporation

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L-ATVThe Oshkosh JLTV Solution

• The future of light tactical vehicles• JLTV EMD contract award

– 22 prototypes for evaluation– Reliability, Availability and

Maintainability (RAM)testing begins late 2013

– Decision expected early 2015• Oshkosh JLTV solution

– Oshkosh TAK-4i intelligent independent suspension system

– Latest automotive technologies– Advanced crew protection system

• Low rate initial production expected in 2016 for contract winner

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The Fire & Emergency Advantage

InnovationLeader

PremierDistribution and Service

Unrivaled Product

Performance

#1 Brands

Leading global provider of specialty vehicles that serve, protect and save lives

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Domestic Fire Market Drivers Stabilizing • Housing prices recovering, property taxes growing

Recent Headlines

New Home Sales Hit Five-Year High, Prices Soar- Reuters, July 24, 2013

Construction Spending in U.S. Rises, Led By Residential Projects- Bloomberg, July 1, 2013

Apocalypse, Not Now, for Municipal Bonds- Barron’s, April 23, 2013

HOUSING PRICES & LOCAL PROPERTY TAXES

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The CommercialAdvantage

Broadest Product Line

Direct Distribution,

Customer Intimacy

Scalable, Flexible

Manufacturing & Operations

Access to Technology, Alternative

Fuels Leadership

Innovation and New Product Development

Best in Class Aftermarket Service and

Support

Integrated factory

Refuse collection vehicle product line

Alternative fuel technology

Street Smart, Street Tough13


• U.S. housing starts assumed by OSK**: 0.8 million in FY13; 1.2 million in FY14; and 1.4 million in FY15

• June 2013 U.S. housing starts* at 836,000

Construction: SubstantialOpportunity with Modest Recovery

Housing Starts and Mixer Shipments (1959-2012)

0

2,000

4,000

6,000

8,000

10,000

12,000

0

500

1,000

1,500

2,000

2,500

Mixer U

nits Shipped

Hou

sing

Sta

rts

(000

s)

Housing Starts Mixer Units Shipped

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Sources: Housing Starts - U.S. Census Bureau. Mixer Shipments - Truck Mixer Manufacturers Bureau; U.S. and Canada.

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2012 2013E 2014E 2015E 2016EHou

sing

Sta

rts

(uni

ts in

mill

ions

)

U.S. Housing Starts Forecast

Moodys Portland Cement Association

Global Insight Average Analyst Estimate


MOVE at Work in Q3*

• Q3 EPS of $1.67– Nearly double Q3 FY12– Access equipment and

defense segments led the way

• MOVE initiatives gaining momentum

• Benefited from positive market conditions in North America

• Repurchased 1.1 million shares – 5.4 million shares YTD

• Increased FY13 adjusted EPS** estimate range– $3.60 to $3.70

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Net

Sal

es(m

illio

ns) EPS

OSK Fiscal Q3 Performance

$2,204 $2,160 $1.67

$0.84

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

$1.50

$1.75

$2.00

$0

$500

$1,000

$1,500

$2,000

$2,500

FY13 FY12Net Sales EPS

* Continuing operations only.

* * FY13 expectations exclude certain non-GAAP adjustments (see Appendix).


Recent PerformanceAccess Equipment• Continue to benefit from replacement demand in

North America• Global conditions remain mixedDefense• Strong operations execution; effectively managing

recent downsizing• Continuing to pursue international businessFire & Emergency• Municipal demand improving, federal demand

remains low• Benefitting from international salesCommercial• Concrete mixer deliveries and orders remain strong• Continuing to invest in MOVE

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Higher Expectations for FY13*

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Additional Expectations• Adjusted corporate expenses ~$145 million

(higher share-based compensation and IT investments vs. FY12)

• Tax rate of ~29.5%• CapEx of ~$45 million• Free cash flow ~$275-$300 million• Average full year share count** of 88.8 million

Segment Information

Measure Access Equipment Defense Fire &

Emergency Commercial

Sales(billions) ~$3.1 ~$3.1 Nearly $0.8 $0.72 - $0.75

Operating Income Margin 12.0%-12.25% ~7.5% 2.0%-2.5% 4.5%-5.0%

• Revenue range of $7.6 billion to $7.7 billion• Adjusted operating income range of $515 million to $525 million• Adjusted EPS from continuing operations range of $3.60 to $3.70

Comments on Fourth Quarter• Expect lowest quarter EPS of the

year due to seasonality and defense sales decline.

* FY13 expectations reflect certain non-GAAP adjustments (see Appendix).** Excludes impact of any additional share repurchases in Q4.


Committed to Shareholders• Aggressively driving to achieve MOVE targets

– Earnings per share of $4.00 to $4.50 in 2015

• Attacking product, process and overhead costs

• Applying disciplined capital allocation strategy

• Will sustain active shareholder outreach

• Deploying Oshkosh Operating System globally to sustain lean culture and drive results

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For more information contact: Patrick N. Davidson

Vice President, Investor Relations(920) [email protected]

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


Net Sales $941.5 $814.6% Change 15.6% 40.4%

Operating Income $154.5 $88.2% Change 75.1% 199.7%% Margin 16.4% 10.8%

Third Quarter

(Dollars in millions)

2013 2012

Appendix: Q3 Access Equipment

• Sales impacted by: Higher volume in

North America Price realization Higher aftermarket volume Lower volume in Australia

• Margins impacted by: Price realization Product and process cost

reduction Product mix

• Backlog down 15% vs.prior year to $621 million Mostly due to lower military

backlog

Comments

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Appendix: Defense

• Sales impacted by: Lower U.S. DoD volume

International truck shipments

• Margins impacted by: Higher international

sales mix

Finalization of UCA pricing

Operational efficiencies• Backlog down 42% vs.

prior year to $1.9 billion

Comments

Net Sales $879.6 $958.5% Change (8.2)% (13.4)%

Operating Income $85.8 $40.2% Change 113.8% (64.3)%% Margin 9.8% 4.2%

Third Quarter


2013 2012

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Net Sales $204.3 $229.6% Change (11.0)% 10.1%

OperatingIncome $6.5 $8.1

% Change (18.8)% (39.6)%% Margin 3.2% 3.5%

Third Quarter*


2013 2012

Appendix: Q3 Fire & Emergency

• Sales impacted by: Lower unit volumes

• Margins impacted by: Lower absorption Price realization

• Backlog* essentially flat with prior year at $503 million

Comments

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* Continuing operations only.


Appendix: Commercial

• Sales impacted by:+ Higher concrete mixer

sales+ Higher content units Lower RCV sales

• Margins impacted by: Restructuring related

costs

• Backlog up 13% vs. prior year to $167 million

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Comments

Net Sales $194.7 $176.2% Change 10.5% 11.2%

Operating Income $10.0 $12.1% Change (17.8)% 224.3%% Margin 5.1% 6.9%

Third Quarter(Dollars in millions)

2013 2012


Appendix: Commonly UsedAcronyms

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ARFF Aircraft Rescue and Firefighting M-ATV MRAP All-Terrain Vehicle

AWP Aerial Work Platform MECV Modernized Expanded Capability Vehicle

CapEx Capital Expenditures MRAP Mine Resistant Ambush Protected

CNG Compressed Natural Gas MSVS Medium Support Vehicle System (Canada)

DoD Department of Defense NPD New Product Development

EAME Europe, Africa & Middle East NOL Net Operating Loss

EMD Engineering & Manufacturing Development OI Operating Income

EPS Diluted Earnings Per Share PLS Palletized Load System

FHTV Family of Heavy Tactical Vehicles PUC Pierce Ultimate Configuration

FMS Foreign Military Sales R&D Research & Development

FMTV Family of Medium Tactical Vehicles RCV Refuse Collection Vehicle

HEMTT Heavy Expanded Mobility Tactical Truck RFP Request for Proposal

HET Heavy Equipment Transporter ROW Rest of World

HMMWV High Mobility Multi-Purpose Wheeled Vehicle SMP Standard Military Pattern (Canadian MSVS)

IT Information Technology TACOM Tank-automotive and Armaments Command

JLTV Joint Light Tactical Vehicle TDP Technical Data Package

JPO Joint Program Office TFFT Tactical Fire Fighting Truck

JROC Joint Requirements Oversight Council TPV Tactical Protector Vehicle

JUONS Joint Urgent Operational Needs Statement TWV Tactical Wheeled Vehicle

L-ATV Light Combat Tactical All-Terrain Vehicle UCA Undefinitized Contract Action

LVSR Logistic Vehicle System Replacement UIK Underbody Improvement Kit (for M-ATV)


Appendix: Non-GAAP to GAAP Reconciliation

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• 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):

Fiscal 2013 ExpectationsCorporateNon-GAAP operating expenses (145.0)$ Tender offer and proxy contest costs (16.3) GAAP operating expenses (161.3)$

Low HighConsolidatedNon-GAAP operating income 515.0$ 525.0$ Tender offer and proxy contest costs (16.3) (16.3) GAAP operating income 498.7$ 508.7$

Non-GAAP earnings per share attributable to Oshkosh Corporation from continuing operations-diluted 3.60$ 3.70$ Tender offer and proxy contest costs, net of tax (0.11) (0.11) GAAP earnings per share attributable to Oshkosh Corporation from continuing operations-diluted 3.49$ 3.59$

Net cash flows provided by operating activities 335.0$ 360.0$ Additions to property, plant and equipment (45.0) (45.0) Additions to equipment held for rental (19.0) (19.0) Proceeds from sale of equipment held for rental 4.0 4.0 Free cash flow 275.0$ 300.0$

Fiscal 2013 Expectations


Appendix: Non-GAAP to GAAP Reconciliation (Cont’d)

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• 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):

2013 2012Non-GAAP earnings per share attributable to Oshkosh Corporation from continuing operations-diluted 3.23$ 1.66$ Tender offer and proxy contest costs, net of tax (0.11) (0.05) Discrete tax benefits - 0.15 GAAP earnings per share attributable to Oshkosh Corporation from continuing operations-diluted 3.12$ 1.76$

Nine Months EndedJune 30,

2013 2012Net cash flows provided by operating activities 247.5$ 74.3$ Additions to property, plant and equipment (25.2) (33.9)Additions to equipment held for rental (13.1) (5.9)Proceeds from sale of equipment held for rental 6.9 3.2Free cash flow 216.1$ 37.7$

Nine Months EndedJune 30,

08-13-13 jefferies conference presentation final · • adjusted corporate expenses ~$145 million...

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