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1 Oshkosh Corporation (NYSE:OSK) Second Quarter Fiscal 2016 April 28, 2016 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

2 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 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, 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 dollar and its impact on Company exports, translation of foreign sales and purchased materials; the expected level and timing of U.S. DoD and international defense customer procurement of products and services and funding or payments thereof; the Company s ability to utilize material and components which it has committed to purchase from suppliers; 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 FMTV 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; 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. April 28, 2016 OSK Second Quarter 2016 Earnings Call 2

3 Q2 FY16 Net Sales (billions) $1.8 $1.6 $1.4 $1.2 $1.0 $0.8 $0.6 $0.4 $0.2 $0.0 OSK Fiscal Q2 Performance $1.5 $1.6 $0.76 FY16 Net Sales Adjusted EPS* FY15 $0.81 Adjusted EPS* $1.00 $0.75 $0.50 $0.25 $0.00 Q2 EPS of $0.76 Exceeded expectations (timing, performance and tax) Higher sales, operating income and operating income margin vs. prior year in all segments except access equipment JLTV protest resolved Awarded international contract for more than 1,000 M-ATVs Slight increase in full year EPS outlook range to $2.30 to $2.70 Driven primarily by lower tax rate and increased defense estimates * Non-GAAP results for FY15. See Appendix for reconciliation to GAAP results. OSK Second Quarter 2016 Earnings Call April 28,

4 Access Equipment Stronger than expected demand in Q2 Believe largely timing Supportive of responsible level of fleet investment Backlog supports second half of 2016 outlook Positive sentiment at recent trade shows BAUMA 2016 ARA Rental Show Mixed global market conditions continue Inventory reduction in Q2; expected to continue in second half Believe long-term trends continue to be positive Construction growth Global product adoption New applications for access equipment 4

5 Defense Defense segment outlook continued to improve JLTV ramp up gaining momentum Competitor protest actions withdrawn Production ramp up expected to be quicker than previous expectations Positive multi-year domestic outlook FY16 contract awards FY17 President s budget request Actively pursuing international contracts Awarded contract for more than 1,000 M-ATVs (funding and delivery schedule not yet finalized) Multiple other opportunities 5

6 Fire & Emergency Another quarter of improved performance Continued modest market recovery Improved municipal spending Large city fleet replacement Revolutionary Ascendant twoaxle aerial ladder truck continues to gain momentum Contributing to share gains Raised production rate during the quarter Leveraging improved operational performance Additional production rate increase planned later in calendar

7 Commercial Improved results compared to prior year quarter Fleet replenishment drove continued RCV market demand New lighter weight Meridian front end loader RCV Beginning initial shipments Market anticipation is high Improved yr/yr concrete mixer order rate in Q2; cautious tone remains Believe long-term concrete mixer dynamics are favorable Increased construction activity Recently passed highway bill (FAST Act) Fleets continue to age 7

8 Consolidated Results (Dollars in millions, except per share amounts) Second Quarter Net Sales $1,524.3 $1,554.2 % Change (1.9)% (7.4)% Operating Income $91.4 $109.7 % Change (16.7)% (8.1)% % Margin 6.0% 7.1% Adjusted EPS $0.76 $0.81* % Change (6.2)% 1.3% Q2 Comments Sales impacted by: Lower access equipment volume Higher defense, fire & emergency and commercial segment sales EPS impacted by: Lower access equipment segment results Higher corporate expenses Higher defense, fire & emergency and commercial segment results Discrete tax items Lower share count * Non-GAAP results for See Appendix for reconciliation to GAAP results. 8

9 Updated Expectations for FY16 Revenues of ~ $5.7 to $6.0 billion Operating income of $305 million to $345 million EPS of $2.30 to $2.70 Segment information Measure Sales (billions) Access Equipment Defense Fire & Emergency Commercial $2.8 to $2.95 $1.15 to $1.20 ~ $0.9 ~ $1.0 Operating Income Margin ~10.0% ~ 5.25% ~ 6.0% ~ 7.0% Additional expectations Corporate expenses of $140 - $145 million Tax rate of ~ 30% CapEx of ~ $100 million Free Cash Flow* ~ $275 million Assumes share count of ~ 74.5 million Earnings weighted to second half Seasonality Cautious construction equipment customers Expect higher operating income margins compared to first half in all segments, except defense segment Expect third quarter will be highest EPS quarter of the year OSK Second Quarter 2016 Earnings Call * Non-GAAP results. See Appendix for reconciliation to GAAP results. April 28,

10 For information contact: Patrick N. Davidson Vice President, Investor Relations (920) Jeffrey D. Watt Director, Investor Relations (920)

11 Appendix: Access Equipment (Dollars in millions) Second Quarter Net Sales $754.3 $981.8 % Change (23.2)% 13.4% Operating Income $75.7 $136.9 % Change (44.7)% 17.4% % Margin 10.0% 13.9% Q2 Comments Sales impacted by: Lower North American volume, primarily telehandlers Operating income impacted by: Lower sales volume Challenging pricing Prior year favorable vendor recovery Unfavorable absorption Lower spending on emissions standards changes Backlog up 2% vs. prior year to $665 million 11

12 Appendix: Defense (Dollars in millions) Second Quarter Net Sales $297.0 $158.7 % Change 87.1% (67.2)% Operating Income / (Loss) $27.8 $(12.0) % Change 333.0% (134.6)% % Margin 9.4% (7.5)% Q2 Comments Sales impacted by: FHTV sales International M-ATV sales Operating income impacted by: Higher sales volume Favorable product mix Backlog up 193% vs. prior year to $1.68 billion* * Recently received international contract for more than 1,000 M-ATVs excluded from defense segment March 31, 2016 backlog 12

13 Appendix: Fire & Emergency (Dollars in millions) Second Quarter Net Sales $240.4 $202.9 % Change 18.5% 30.0% Operating Income $14.9 $9.0 % Change 66.0% 750.1% % Margin 6.2% 4.4% Q2 Comments Sales impacted by: Higher fire apparatus volume Operating income impacted by: Higher sales volume Improved operational efficiencies Backlog up 26% vs. prior year to $903 million 13

14 Appendix: Commercial (Dollars in millions) Second Quarter Net Sales $236.7 $220.9 % Change 7.1% 21.2% Operating Income $17.2 $8.6 % Change 99.0% 59.9% % Margin 7.3% 3.9% Q2 Comments Sales impacted by: Higher RCV volume Operating income impacted by: Improved product mix Higher sales volume Backlog down 1% vs. prior year to $289 million 14

15 Appendix: Commonly Used Acronyms ARFF Aircraft Rescue and Firefighting MRAP Mine Resistant Ambush Protected AWP Aerial Work Platform MSVS Medium Support Vehicle System (Canada) CapEx Capital Expenditures NOL Net Operating Loss CNG Compressed Natural Gas NPD New Product Development DGE Diesel Gallon Equivalent NRC National Rental Company DoD Department of Defense OCO Overseas Contingency Operations EAME Europe, Africa & Middle East OH Overhead EMD Engineering & Manufacturing Development OI Operating Income EPS Diluted Earnings Per Share 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 LVSR Logistic Vehicle System Replacement ZR Zero Radius M-ATV MRAP All-Terrain Vehicle OSK Second Quarter 2016 Earnings Call April 28,

16 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): Three Months Ended March 31, 2015 Adjusted earnings per share-diluted (non-gaap) $ 0.81 Debt extinguishment costs, net of tax (0.12) Earnings per share-diluted (GAAP) $ 0.69 Fiscal 2016 Expectations Net cash flows provided by operating activities $ Additions to property, plant and equipment (100.0) Free cash flow $