q1 2017 earnings slides

MOVING THE WORLD AT WORK

First Quarter Fiscal 2017 January 26, 2017

Wilson R. Jones President and Chief Executive Officer David M. Sagehorn Executive Vice President and Chief Financial Officer Patrick N. Davidson Vice President, Investor Relations

Oshkosh Corporation (NYSE:OSK)


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, 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 and construction seasons; the Company’s estimates of access equipment demand which, among other factors, is influenced by customer historical buying patterns and rental company fleet replacement strategies; 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 U.S. Department of Defense (DoD) and international defense customer procurement of products and services and acceptance of and funding or payments for such products and services; higher material costs resulting from production variability due to uncertainty of timing of funding or payments from international defense customers; risks related to reductions in government expenditures in light of U.S. defense budget pressures, sequestration and an uncertain DoD tactical wheeled vehicle strategy; the impact of any DoD solicitation for competition for future contracts to produce military vehicles, including a future Family of Medium Tactical Vehicle production contract; 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; the impact of severe weather or natural disasters that may affect the Company, its suppliers or its customers; 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, including any delays as a result of a recent accident at the Company’s Dodge Center manufacturing facility; 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; 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 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.

January 26, 2017 OSK First Quarter 2017 Earnings Call 2


Solid Start to FY17

Oshkosh Corporation: 100 years strong in 2017

Q1 EPS of $0.26 exceeded Company expectations

− Access equipment and defense drove the stronger performance

Taking action in access equipment segment to simplify operations and reduce cost structure

Reiterating full year FY17 adjusted EPS* outlook range of $3.00 to $3.40

Net Sales (billions) EPS

3

OSK Fiscal Q1 Performance

January 26, 2017 OSK First Quarter 2017 Earnings Call

$0.26

$0.19

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

FY17 FY16

$1.21 $1.25

$0.0

$0.2

$0.4

$0.6

$0.8

$1.0

$1.2

$1.4

$1.6

$1.8

$2.0

FY17 FY16

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


Access Equipment Solid performance in continued

challenging market environment − Higher operating income on lower sales − Ongoing lower replacement demand − Continued challenging pricing

Customer sentiment in North America has remained strong − Solid utilization and stabilizing rental rates − Positive commentary on construction activity

and other indicators

Continued positive long-term outlook − Positive construction trends − Replacement demand expected to

become a tailwind − Potential for positive infrastructure

stimulus benefit



Restructuring in Access Equipment Previously announced (September 2016) Aftermarket distribution center outsourcing in U.S. and Europe − Expecting ~$6 million annualized savings beginning in FY18

Today’s announcement: Rationalizing operations and product offerings in Europe − Moving European telehandler manufacturing from Belgium to Romania − Streamlining European telehandler product lineup − Exiting UK engineering center

Consolidating North American telehandler manufacturing operations in early FY18 − Moving from Ohio to Pennsylvania facilities

Expecting annualized cost reduction of $20-$25 million − Full run rate in FY19, partial year savings of $15-$20 million

expected in FY18 Expecting implementation costs of $45-$50 million (including ~$10 million non-cash charges)

− ~$43 million to be incurred in FY17 − Will report results on adjusted, non-GAAP basis excluding implementation costs



Defense Strong start to the year

JLTV LRIP phase gaining momentum − Production ramp up continuing

− Supporting government testing

− Continued international interest

Executing well on programs of record − FHTV − FMTV (competitor protest withdrawn)

Ramping up international M-ATV production

Preparing proposal for FMTV recompete



Fire & Emergency

Simplification actions positively impacting operational performance

Fire apparatus market expected to be up modestly in FY17 − Market declined 5.6% in FY16 − Pierce remains the industry leader

with best in class dealer network Expect solid municipal tax receipts

and aged fleets to continue to drive positive outlook over next several years

Demand for Ascendant 107’ aerial ladder has exceeded expectations



Commercial Lower order pace negatively

impacted Q1 performance − Lower absorption − Implemented cost reduction actions

Concrete mixer customers remain cautious − Watching construction trends − Considering potential impact of an

infrastructure stimulus package − Fleet age continues to point towards

need for replacement RCV customers paused in Q1 − Pre-election slowdown − Fleet age continues to point towards

need for replacement



Consolidated Results

Sales impacted by: − Lower access equipment and

defense segment sales

+ Higher fire & emergency segment sales

EPS impacted by: + Higher fire & emergency and

access equipment segment operating income

− Lower commercial segment operating income

Q1 Comments

(Dollars in millions, except per share amounts)

First Quarter

Net Sales $1,211.4 $1,252.0 % Change (3.2)% (7.5)% Operating Income $36.2 $30.3 % Change 19.4% (51.3)% % Margin 3.0% 2.4% EPS $0.26 $0.19 % Change 36.8% (53.7)%

2017 2016



FY17 Expectations

10

Revenues of $6.5 to $6.7 billion

Adjusted operating income* of $390 million to $430 million

Adjusted EPS* of $3.00 to $3.40

Q2 Commentary – Expect higher sales vs. prior year

– Higher defense and fire & emergency segment sales to offset lower access equipment segment sales

– Expect lower adjusted EPS vs. prior year – Adverse mix between segments (higher defense

and lower access equipment ) – Excludes expected pre-tax impact of access

equipment segment restructuring-related costs of $25 to $30 million

Additional expectations – Corporate expenses of $140 - $145 million – Tax rate* of ~32.5% - 33.0% – CapEx of ~$100 million – Free Cash Flow* of $0 to $50 million – Assumes share count of ~76.0 million

Segment information

Measure Access Equipment Defense Fire &

Emergency Commercial

Sales (billions) $2.7 to $2.8 ~$1.85 ~$1.0 ~$0.975

Adj. Operating Income Margin 7.75% - 8.5%* ~9.75% ~8.5% ~6.5%

OSK First Quarter 2017 Earnings Call January 26, 2017

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


For information contact:

Patrick N. Davidson Vice President, Investor Relations (920) 966-5939 [email protected]

Jeffrey D. Watt Director, Investor Relations (920) 233-9406 [email protected]



Net Sales $489.2 $529.8 % Change (7.7)% (26.1)% Operating Income $24.4 $20.4 % Change 19.2% (73.5)% % Margin 5.0% 3.9%

First Quarter

(Dollars in millions)

2017 2016

Appendix: Access Equipment

Sales impacted by: − Lower volume in North America

and EMEA

Operating income impacted by: + Timing of new product

development costs + Product mix − Lower sales

Backlog down 18% vs. prior year to $594 million

Q1 Comments



Appendix: Defense

Sales impacted by: − Prior year international M-ATV

sales + Higher FHTV volume

Operating income impacted by: + Favorable mix + Performance on multi-year

contracts − Lower volume − Higher bid and proposal costs

Backlog up 80% vs. prior year to $2.2 billion

Q1 Comments

Net Sales $294.5 $318.0 % Change (7.4)% 18.1% Operating Income $23.8 $23.2 % Change 2.6% 262.0% % Margin 8.1% 7.3%

First Quarter


2017 2016



Net Sales $232.5 $207.5 % Change 12.0% 24.2% Operating Income $17.0 $10.1 % Change 68.1% 556.8% % Margin 7.3% 4.9%

First Quarter


2017 2016

Appendix: Fire & Emergency

Sales impacted by: + Higher Pierce fire truck and

airport products volume + Improved pricing

Operating income impacted by: + Price realization + Higher sales volume

Backlog flat vs. prior year at $901 million

Q1 Comments



Appendix: Commercial

Sales impacted by: − Lower unit volume + Higher content units

Operating income impacted by: − Adverse absorption

Backlog down 12% vs. prior year to $237 million

Q1 Comments

Net Sales $199.2 $200.3 % Change (0.6)% (4.7)% Operating Income $4.6 $8.9 % Change (47.9)% (28.3)% % Margin 2.3% 4.4%

First Quarter


2017 2016




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 High

Adjusted access equipment operating income margin (Non-GAAP) 7.75% 8.50%Restructuring-related costs (1.60%) (1.55%)Access equipment operating income margin (GAAP) 6.15% 6.95%

Adjusted consolidated operating income (Non-GAAP) 390.0$ 430.0$ Restructuring-related costs (43.0) (43.0) Consolidated operating income (GAAP) 347.0$ 387.0$

Adjusted effective income tax rate (Non-GAAP) 32.5% 33.0%Impact of restructuring-related costs on effective income tax rate 2.9% 2.9%Effective income tax rate (GAAP) 35.4% 35.9%

Adjusted diluted earnings per share (Non-GAAP) 3.00$ 3.40$ Restructuring-related costs (0.50) (0.50) Diluted earnings per share (GAAP) 2.50$ 2.90$

September 30, 2017 ExpectationsFiscal Year Ended



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):

Low HighNet cash flows provided by operating activities 100.0$ 150.0$ Additions to property, plant and equipment (100.0) (100.0) Free cash flow -$ 50.0$

Fiscal 2017 Expectations


Appendix: Commonly Used Acronyms

18 January 26, 2017 OSK First Quarter 2017 Earnings Call

ARFF Aircraft Rescue and Firefighting LVSR Logistic Vehicle System Replacement AWP Aerial Work Platform M-ATV MRAP All-Terrain Vehicle AMPS Aftermarket Parts & Service MRAP Mine Resistant Ambush Protected CapEx Capital Expenditures MSVS Medium Support Vehicle System (Canada) CNG Compressed Natural Gas NOL Net Operating Loss DGE Diesel Gallon Equivalent NPD New Product Development DoD Department of Defense NRC National Rental Company EMD Engineering & Manufacturing Development OCO Overseas Contingency Operations EMEA Europe, Middle East & Africa OH Overhead EPS Diluted Earnings Per Share OI Operating Income FAST Act Fixing America’s Surface Transportation Act OOS Oshkosh Operating System FHTV Family of Heavy Tactical Vehicles OPEB Other Post-Employment Benefits FMS Foreign Military Sales PLS Palletized Load System FMTV Family of Medium Tactical Vehicles PUC Pierce Ultimate Configuration GAAP U.S. Generally Accepted Accounting Principles R&D Research & Development GAO Government Accountability Office 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) IRC Independent Rental Company TACOM Tank-automotive and Armaments Command IT Information Technology TDP Technical Data Package JLTV Joint Light Tactical Vehicle TPV Tactical Protector Vehicle JPO Joint Program Office TWV Tactical Wheeled Vehicle JROC Joint Requirements Oversight Council UCA Undefinitized Contract Action JUONS Joint Urgent Operational Needs Statement UIK Underbody Improvement Kit (for M-ATV) L-ATV Light Combat Tactical All-Terrain Vehicle UK United Kingdom LRIP Low Rate Initial Production ZR Zero Radius