oshkosh osk_q4_2008_earnings_release_slides

Built strong.Building for the future.

Robert G. BohnChairman and Chief Executive Officer

Charles L. SzewsPresident and Chief Operating Officer

David M. SagehornExecutive Vice President and Chief Financial Officer

Patrick N. DavidsonVice President of Investor Relations

Earnings Conference CallFourth Quarter Fiscal 2008November 3, 2008


OSK - Fiscal Q4 2008 Conference Call - Nov. 3, 2008

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Forward Looking StatementsOur remarks that follow, including answers to your questions and these slides, include statements that we believe are “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 consequences of financial leverage associated with the JLG acquisition, especially given recent turmoil in the credit markets, the level of the Company’s borrowing costs and the Company’s ability to maintain compliance with financial covenants in its credit agreement; the cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, especially during a global economic downturn and credit crisis; the Company’s ability to offset higher steel and raw material costs through other cost decreases or product selling price increases; the expected level and timing of U.S. Department of Defense procurement of products and services and funding thereof; risks related to reductions in government expenditures and the uncertainty of government contracts; risks associated with international operations and sales, including foreign currency fluctuations; the Company’s ability to turn around its Geesink business; risks related to the collectibility of access equipment receivables; and the potential for increased costs relating to compliance with changes in laws and regulations. Additional information concerning these and other factors and assumptions is contained in our filings with the SEC, including our Form 8-K filed November 3, 2008. Except as set forth in such Form 8-K, we disclaim any obligation to update such forward-looking statements.



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Oshkosh Fiscal Q4 2008 HighlightsSales increased 5.8% to $1.9 billion

Operating income decreased 32% to $122 million

EPS decreased 37% to $0.72, but exceeded previous estimates

Inventory reduced by $241 million

$202 million of debt reduction

OSK Q4 Performance(millions)

$1,792

$904

$1,897

$122.1

$179.2

$76.6

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2006 2007 2008$0.0

$50.0

$100.0

$150.0

$200.0

$250.0

$300.0

Net Sales Operating Income

Net

Sal

es

Operating Incom

e



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Oshkosh Fiscal 2008 HighlightsSales increased 13.2% to $7.1 billion

– International sales 30% of total, reaching $2.1 billion

– Market share gains and record orders at Pierce and domestic refuse

Operating income decreased 1.5% to $582 million*

EPS decreased 5.9% to $3.37*


Decisive actions taken to raise prices, reduce costs and drive cash flow in the face of:

– North American and European economic downturn, escalating steel and fuel costs and credit crisis

Continued to improve talent across the Company* Figures exclude non-cash charges to operating income for asset impairment of $175.2 million or $173.1 million net of tax



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Current State ConditionsMarket volatility and credit crisis make it very difficult to project fiscal 2009

Defense, fire and domestic refuse backlogs partially mitigate difficulties

Better positioned to address challenging conditions– Improved cost structure; eliminated an expected $100 million of annual costs

– Lowered debt and inventories

– Actively sourcing in low-cost countries

– Re-energizing operations with Global Manufacturing Services executive

Moving forward with plan seeking to avoid or delay credit agreement amendment in fiscal 2009

– Action plans to drive $500 million or more in debt reduction

– Will assess ability to achieve plan quarterly

Continuing to invest in limited global and new product development initiatives



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Access EquipmentStrong results in emerging markets did not offset weakness in North America and, to a lesser extent, Western Europe

– Second highest fiscal Q4 sales for JLG

Timing of price increase limiting recovery of costs

Responsible inventory reduction

Outlook for 2009

– North America

– Europe

– ROW



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DefenseContinued truck and parts & service growth during quarter

Recently announced FHTV contract (HEMTT A4)

Additional MTVR reducible-height armor kit award

UK LET 2 preferred bidder notification



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Fire & Emergency

Pierce continued to gain share and strengthen backlog, even with softer municipal spending

Continued strong international airport products activity, primarily in Asia

Recent uptick in broadcast vehicle activity

Wilson Jones promoted to segment president



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CommercialU.S. concrete markets remain depressed

Domestic refuse collection vehicle sales grew in slightly down market

CNG-powered market is growing– 40+% savings versus diesel

– After credits, affordable upfront cost

Geesink Norba exiting restructuring phase

– Fiscal 2009 expected to benefit from actions taken in fiscal 2008



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Consolidated Results

Sales led by defense, fire & emergency and domestic refuse businesses

Margins impacted by:– Volume– Adverse sales mix– Unrecovered steel

and other costs


Net Sales $1,896.5 $1,792.4% Growth 5.8% 98.2%

Operating Income $122.1 $179.2% Margin 6.4% 10.0%% Growth (31.9)% 134.1%

Earnings Per Share $0.72 $1.14% Growth (36.8)% 72.7%

(Dollars in millions, except per share amounts)

Comments2008 2007

Fourth Quarter

Presenter

Presentation Notes



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Access Equipment

Net Sales $742.1 $840.0% Growth (11.7)% NA

Operating Income $50.2 $114.5% Margin 6.8% 13.6%% Growth (56.2)% NA

CommentsLower revenues in North America and Western Europe

Margin decline due to:– Lower volume– Steel costs– Adverse product mix

Backlog down 61.4% vs. prior year

2008 2007Fourth Quarter

(Dollars in millions)

Presenter

Presentation Notes



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Defense

Increased truck and parts & service sales

Margin impacted by higher volume on lower margin contracts

Backlog down 22.9% vs. prior year due largely to timing of FHTV3 contract negotiations

Net Sales $553.4 $422.5% Growth 31.0% 28.6%

Operating Income $75.1 $72.4% Margin 13.6% 17.1%% Growth 3.8% 32.0%

Comments2008 2007

Fourth Quarter


Presenter

Presentation Notes



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Fire & Emergency

Net Sales $366.5 $291.8% Growth 25.6% 8.7%

Operating Income $33.2 $26.3% Margin 9.1% 9.0%% Growth 26.2% 22.8%

Comments

Sales driven by:– Domestic fire apparatus– Timing of international

fire apparatus deliveries– Airport products

Margins impacted by:– Volume– Higher costs

Backlog up 9.6% vs. prior year

2008 2007

Fourth Quarter(Dollars in millions)

Presenter

Presentation Notes



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Commercial

Net Sales $261.2 $249.6% Growth 4.7% (21.8)%

Operating Loss $(6.9) $(3.1)% Margin (2.6)% (1.2)%

% Growth (123.7)% (118.0)%

Comments2008 2007

Fourth Quarter


Concrete markets remain weak in U.S.

Continued gains with domestic refuse orders

Margins impacted by:– Geesink rationalization

and efficiency costs– Concrete volumes

Backlog flat with prior year

Presenter

Presentation Notes



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Oshkosh Fiscal 2009 Estimates

Expectations:

Access Equipment sales to decrease approximately 30%

Defense sales to increase approximately 20-25%

Fire & Emergency sales to decrease approximately 5-10%

Commercial sales flat to down approximately 10%

Revenue of $6.3 to $6.7 billion



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Expectations:Access Equipment margins of approximately 3.5% to 4.5%Defense margins to decline by 200 to 250 bpsFire & Emergency margins to increase approximately 100 to 150 bpsCommercial margins slightly better than break-evenCorporate expenses flat to slightly down

Operating Income of $350 to $400 million




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Interest expense and other Approximately $180 million (expense)*

Effective tax rate 33%

Equity in earnings Approximately $4.0 million (income)

Average shares outstanding 75.0 million

Other Estimates


* Assumes no credit agreement amendment



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FY09 EPS estimate range* of $1.65 to $2.05

Loss expected in seasonally weak first quarter– Credit crisis impacting demand– Unrecovered steel and other costs


* Assumes no credit agreement amendment



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$202 million debt reduction in Q4– In compliance with financial covenants at Sept. 30, 2008

Driving plan seeking to avoid or delay credit agreement amendment in fiscal 2009 that requires:

– Delivering earnings at higher end of estimate range– Achieving $500 million or more in debt reduction

Tightly managing spending– Further reductions likely if demand softens

Continuing actions to reduce working capital– Strong focus on inventory reduction– Negotiating European receivables sales program

Limiting capital expenditures to $60 millionSufficient liquidity, even if amendment is necessary

Oshkosh Financing Update



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Global market conditions are volatile and difficult to project, but Oshkosh is moving forward with:

– Powerful leading brands– Prudent investments in key global markets– Value-driven sourcing– Lower cost structure to mitigate weak market conditions– Manufacturing excellence initiatives– Cash generation to deliver debt reduction

The Oshkosh team is Built Strong and ……committed to Building for the Future

Oshkosh Summary



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Appendix: Non-GAAP Financial MeasuresThe table below presents reconciliations of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures for the fiscal year ended September 30, 2008 (in millions, except per share amounts):

Non-GAAP operating income 581.5$ Intangible asset impairment charges (175.2) GAAP operating income 406.3$

Non-GAAP net income 252.4$ Intangible asset impairment charges (175.2) Income tax benefit associated with intangible asset impairment charges 2.1 GAAP net income 79.3$

Non-GAAP earnings per share 3.37$ Intangible asset impairment charges per share (2.31) GAAP earnings per share 1.06$

Non-GAAP pre-tax income 365.6$ Intangible asset impairment charges (175.2) GAAP pre-tax income 190.4$

Non-GAAP income tax expense 120.2$ Income tax benefit associated with intangible asset impairment charges (2.1) GAAP income tax expense 118.1$

Non-GAAP effective income tax rate 32.9%GAAP effective income tax rate 62.0%

oshkosh osk_q4_2008_earnings_release_slides

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