60 slides from Oshkosh Corporation (holding Company)'s proxy contest presentation, Jan 9, 2012
Slide 1: Oshkosh Corporation Investor Presentation – Update January 2012
Oshkosh Corporation Investor Presentation – Update January 2012
Slide 2: Forward-Looking Statements
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
Slide 3: Oshkosh: Global Leader in Specialty Vehicles
Oshkosh: Global Leader in Specialty Vehicles Oshkosh is a global leader in specialty vehicles with a strong performance record 98% of sales are represented by the #1 brands in their respective markets Over the past three years, we generated annualized TSR of 44.9% Over the past 15 years, we generate
Slide 4: Agenda
Who is Oshkosh? Our leading brands and businesses Our responses to recent challenges Our Board took action Our MOVE Strategy How MOVE will deliver value to our shareholders Independent and well-qualified Strong new directors have recently been added Strong governance practices Prudent compensation p
Slide 5: Overview of Oshkosh
Overview of Oshkosh a | MISSION DRIVEN: To Move the World at Work osHKOsH 5
Slide 6: Oshkosh Corporation Moves the World at Work
Oshkosh Corporation Moves the World at Work DEFENSE ACCESS EQUIPMENT FIRE & EMERGENCY COMMERCIAL 6
Slide 7: Company Facts
Company Facts Incorporated in 1917 Listed on NYSE (Ticker: OSK) Employees: 13,100 FY11 Revenue: $7,585 million FY11 Operating Income: $501 million FY11 ROIC: 14.5%1 Market Capitalization: $1.9 billion 9/30/2011 Net Debt: $632 million Segment End Market Overview Access equipment Rental companies, con
Slide 8: A Portfolio of Industry Leading Brands
A Portfolio of Industry Leading Brands1 GLOBAL RANK Access Equipment #1 Fire Apparatus #1 Airport Products #1 THE AMERICAS RANK Concrete Mixers / Batch Plants #1 Refuse Collection Vehicles #1 98% of our sales are represented by the #1 brands in their respective markets “Since acquiring Pierce in 199
Slide 9: Successfully Responding to Changing Market Conditions
Source: IBES Consensus Estimates and Company Filings and market data as of 05-Dec-2011. Total shareholder return CAGRs from 30-Sep-1996 to 05-Dec-2011 and Oshkosh revenue figures represent results from continuing operations per fiscal years ending 30-Sep-1996 through 30-Sep-2011. All Peers include:
Slide 10: Oshkosh Operates More Efficiently than Peers
SG&A relative to Sales Oshkosh Corp1: 7.1% Peer group2: 9.4% Increased SG&A efficiency during downturn Oshkosh Corp3: 5.0% Peer group2: 11.8% ISS Comp group4: 11.2% Oshkosh Operates More Efficiently than Peers ATK CRDN CMI DOV FSS FRPT GD MTW NAV NOC PCAR RTN TEX 8.4% 15.2% 11.2% 23.8% 21.3% 13.3% 4
Slide 11: Prudent Capital Management and Stewardship
Prudent Capital Management and Stewardship Aggressively managed the Company’s balance sheet to weather downturn Reduced debt by $2.0 billion since March 31, 2008 Opportunistically invested to win business that created shareholder value M-ATV contract drove substantial profits over past two fiscal ye
Slide 12: During the Recession, Our End Markets Have Faced Severe Headwinds
During the Recession, Our End Markets Have Faced Severe Headwinds The recession has had a disproportionately negative impact on Oshkosh’s end markets Defense Markets U.S. Defense budget remains unsettled, with spending reductions coming Global instability continues – several countries considering la
Slide 13: With Unprecedented Trough Levels of Demand
With Unprecedented Trough Levels of Demand 1 Rolling four quarter sales Source: U.S. Census Bureau, Bloomberg, FAMA, TMMB –Truck Mixer Manufacturers Bureau and Moody’s Analytics Change Since Last Peak: (40)% 13 Challenges and Opportunities in Our End Markets (15)% (10)% (5)% 0% 5% 10% 15% 20% 25% FY
Slide 14: Our Board and Management Take Decisive Action
Our Board and Management Take Decisive Action Winning new business M-ATV and FMTV wins Developed L-ATV, a leading candidate for JLTV and Oshkosh’s entry into light tactical wheeled vehicle market Improving relative margins and market share of JLG versus next largest competitor Reducing costs Facilit
Slide 15: Responding to Market Opportunities: M-ATV
Responding to Market Opportunities: M-ATV Difficult Afghan terrain demands a more mobile, reliable product – and Oshkosh seized the opportunity Oshkosh delivered a new durable, survivable vehicle tailored to our customer’s extreme off-road-terrain mobility needs and won business against tough compet
Slide 16: Increasing Market Share – #1 TACOM Contractor
Increasing Market Share – #1 TACOM Contractor Oshkosh Defense ($ in billions) Source: TACOM FY09 – FY11 Cumulative Awards 16 ...From #3 / #4 in FY06 - FY08
Slide 17: Strengthening the Business – FMTV Contract Win
Strengthening the Business – FMTV Contract Win1 Largest requirement of any TWV program 18,700 trucks and 8,000 trailers under contract Ramp up challenges Tripling of truck orders Orders ahead of price increases TDP and new contract language Profitable in Q1 FY12 Improved vehicle performance and qual
Slide 18: Building on Our JLG Platform
Building on Our JLG Platform Acquisition of JLG in December 2006 Part of strategy to diversify Potential to grow faster than GDP, expand margins and go global faster JLG has become integral to our business JLG was critical to M-ATV and other defense wins JLG has performed well in spite of unpreceden
Slide 19: Our MOVE Strategy
Our MOVE Strategy ~ MISSION DRIVEN. OSHKOSH 2
Slide 20: Oshkosh Board's Comprehensive Review
Oshkosh Board’s Comprehensive Review Facing historic demand pressures in our end markets in 2010, our Board initiated a comprehensive review of our business Scope of work went beyond annual strategic planning Retained leading globally-recognized consulting firm to assist in reviewing, analyzing and
Slide 21: MOVE Strategy
MOVE Strategy Capture full upside of economic recovery and market growth with strong focus on execution and conquest sales Continue to lead in innovation over the product life cycle Drive international growth in targeted geographies Optimize our cost and capital structure to provide value for custom
Slide 22: Market Recovery and Growth
- Market Recovery and Growth Non-defense markets have significant upside potential M OSK Operating Income ($ millions) Approaching $500M opportunity in recovery * Prior Peak Operating Income: Access $363M – FY08, F&E $96M – FY07, Commercial $76M – FY07. ** FY11 Operating Income: Access $65M, F&E ($3
Slide 23: Market Recovery and Growth Opportunities
Market Recovery and Growth Opportunities Access Equipment Industry continues to strengthen Encouraging market indicators: aging fleets and rising values Fire & Emergency Global opportunities despite U.S. municipal headwinds International airport growth Desire for technology in emerging markets (e.g.
Slide 24: Optimize Cost and Capital Structure
- Optimize Cost and Capital Structure Additional 250 bps operating income margin opportunity by FY16 through a combination of product, process and overhead improvements designed to lower our cost structure Plus absorption benefit from market recovery Cutting costs prudently without jeopardizing the
Slide 25: Value Innovation
- Value Innovation Deliver products with the innovations our customers need TAK-4® independent suspension system Key component on multiple future program opportunities Dash Cab Forward (CF) Expected to become 30% of Oshkosh fire truck sales CNG-powered vehicles Moving to 30%+ of Oshkosh RCV sales M-
Slide 26: Emerging Market Expansion
- Emerging Market Expansion Oshkosh’s net sales outside U.S. grew from 10% in FY10 to 17% in FY11 Goal of 30% within five years from organic expansion - $1 billion revenue opportunity Growth opportunities will come from multiple sources Continued infrastructure build in Latin America Brazil planning
Slide 27: Recent Third Party Perspectives
Recent Third Party Perspectives “We applaud management’s decision to move forward with its “Move” strategy to reignite earnings growth.” - SunTrust, 1-Aug-2011 “OSK has a tough end market problem, not a management problem.” - OSK Top 10 shareholder, 29-Nov-2011 “We think Oshkosh offers a substantial
Slide 28: Oshkosh's Board and Corporate Governance
Oshkosh’s Board and Corporate Governance 29
Slide 29: Oshkosh's Independent Board – The Right Experience to Lead Oshkosh
Oshkosh’s Independent Board – The Right Experience to Lead Oshkosh Independent oversight 12 of 13 directors are independent Separate, independent chairman New perspectives Five of Oshkosh’s independent directors have joined the Board since October 2010 with three new directors (one a nominee) added
Slide 30: Oshkosh's Board: Diverse and Proven Leadership
Oshkosh’s Board: Diverse and Proven Leadership with Investor, Financial and Executive Backgrounds Richard Donnelly Current Position: Advisor for Celerant Consulting Former Positions: Various positions at General Motors; RHJ International Michael Grebe Current Position: President / CEO of Lynde and H
Slide 31: Oshkosh's Board: Diverse and Proven Leadership
Oshkosh’s Board: Diverse and Proven Leadership with Investor, Financial and Executive Backgrounds Peter Mosling Current Position: Director at OSK Former Position: Various senior executive positions at Oshkosh Craig Omtvedt Current Position: Director at General Cable Former Position: CFO at Fortune B
Slide 32: New Additions to Oshkosh's Board of Directors
New Additions to Oshkosh’s Board of Directors John Shiely (Nominee) Peter Hamilton Current Directorships: Quad/Graphics, Scotts Miracle-Gro, and BMO Financial Corporation Former Directorships: Marshall & Ilsley and Briggs & Stratton Corporation Experience as a CEO, directorships at publicly traded c
Slide 33: New Additions to Oshkosh's Board of Directors
New Additions to Oshkosh’s Board of Directors Lt. General Leslie Kenne General William Wallace Current Directorships: Harris Corporation and Unisys Corporation Former Position: Deputy Chief of Staff at Warfighting Integration at Pentagon Expertise: directorship, leadership and defense acquisition ex
Slide 34: Oshkosh Embraces Strong Corporate Governance
Oshkosh Embraces Strong Corporate Governance Directors are elected annually Director resignation policy if no majority vote in uncontested elections Separate CEO and Chairman Company bylaws mandate independent chairman Shareholders have the ability to call special meetings Directors can be removed w
Slide 35: Management Incentives Aligned with Shareholders
Management Incentives Aligned with Shareholders Overall compensation of top executives lower than that of peers CEO cash compensation at 25th percentile1 Named executive compensation targets 50th percentile or lower1 CEO Szews, based on his own recommendation, did not receive equity-based long-term
Slide 36: Mr. Icahn's Proxy Contest
Mr. Icahn’s Proxy Contest < MISSION DRIVEN: 7o Move the World at Work
Slide 37: Background of Discussions with the Icahn Group
First notification of Icahn Group position in June 2011 filing, at 9.51% Built position using derivative securities Prior to day of filing, no contact from Icahn Group Oshkosh management initially met with Mr. Icahn or his representatives two times and held multiple calls During these meetings, Mr.
Slide 38: Interaction with the Icahn Group
On December 6, 2011, Mr. Icahn publicly supported a merger with Navistar We set a third meeting with Mr. Icahn to understand his statements to the press We asked Mr. Icahn for his analysis regarding a transaction with Navistar and, once again, he refused to provide us with any Oshkosh discussed with
Slide 39: Mr. Icahn's Nominees
Mr. Icahn’s Nominees Mr. Icahn’s slate is almost entirely comprised of employees and others with close personal ties to him Nominees who are current employees of Mr. Icahn or an Icahn entity: Daniel Ninivaggi: President and General Partner of Icahn Enterprises Vincent Intrieri: Senior Vice President
Slide 40: Mr. Icahn's Directors Do Not Have Relevant Experience
Mr. Icahn’s Directors Do Not Have Relevant Experience to Drive Long-term Shareholder Value 1 Former Executive Director of the CIA, and Counselor to the Director of Central Intelligence. Currently serves as Vice-Chair of the Johns Hopkins Health System. Note: * indicates directorship associated with
Slide 41: Mixed Track Record of Mr. Icahn's Director Nominees
- Mr. Icahn’s nominees have a mixed track record of delivering value on public company boards Mr. Icahn’s own investment vehicle, IEP, has had lackluster performance 1 month: (6.9)% 3 months: 0.1% 6 months: (15.3)% 1 year: 3.0% 3 years: (2.4)% 5 years: (57.5)% Motricity – Mr. Icahn provided the comp
Slide 42: Conclusion
Conclusion Ca MISSION DRIVEN: osHKOsH °
Slide 43: The Oshkosh Board is the Right Team
The Oshkosh Board is the Right Team Oshkosh’s strong franchise is well positioned, despite end markets at historical low points In response to challenges in our end markets, the Company took, and continues to take, decisive action Oshkosh’s independent, experienced nominees are best suited to drive
Slide 44: Appendix
Appendix MISSION DRIVEN: To Move the World at Work
Slide 45: Director Bios
Director Bios From 1961 until his retirement in 1999, Mr. Donnelly held various positions with General Motors Corporation, a manufacturer of motor vehicles, including most recently as President and Group Executive of General Motors, Europe, a division of General Motors Corporation. Since July 2011,
Slide 46: Director Bios
Director Bios Mr. Grebe currently serves as President and Chief Executive Officer of the Lynde and Harry Bradley Foundation, a private foundation based in Milwaukee, a position he has held since 2002. Mr. Grebe was a partner practicing corporate law in the national law firm of Foley & Lardner LLP fr
Slide 47: Director Bios
Director Bios Our Board of Directors appointed Mr. Hamilton to our Board of Directors on July 18, 2011. Mr. Hamilton currently serves as Senior Vice President and Chief Financial Officer of Brunswick Corporation, a leading global designer, manufacturer and marketer of recreational products, a positi
Slide 48: Director Bios
Director Bios Ms. Hempel is the former Vice Chairman and Chief Financial Officer of Fort Howard Corporation, a manufacturer of paper and paper products, a position she held from 1992 until its merger into Fort James Corporation in 1997. Ms. Hempel joined Fort Howard Corporation in 1973 and served in
Slide 49: Director Bios
Director Bios Lt. Gen. (Ret.) Kenne is retired from the United States Air Force. Lt. Gen. (Ret.) Kenne currently acts as an independent consultant to various organizations and businesses serving the U.S. Department of Defense. She served as the Deputy Chief of Staff, Warfighting Integration at the P
Slide 50: Director Bios
Director Bios Mr. Medvin served as Executive Vice President and Chief Financial Officer of Aon Corporation (and its corporate predecessor), a provider of risk management services and insurance brokerage, from 1982 until his retirement in 2003. He is a director of The Warranty Group, Inc. (a subsidia
Slide 51: Director Bios
Director Bios Mr. Mosling was part of the founding family of Oshkosh. He served in various senior executive capacities during his employment with our company from 1969 through his retirement in 1994 Mr. Mosling’s prior service as an executive of our company and longstanding service as a director of
Slide 52: Director Bios
Director Bios Mr. Omtvedt served as Senior Vice President and Chief Financial Officer for Fortune Brands, Inc., a leading consumer products company, from 2000 until October 2011. He will serve as an advisor to Beam Inc. during 2012. He had been with Fortune Brands since 1989 serving in various capac
Slide 53: Director Bios
Director Bios Our Board of Directors appointed Mr. Palmer to our Board of Directors on July 18, 2011. Mr. Palmer currently serves as Senior Vice President and Chief Financial Officer of Owens Corning, a leading glass fiber company, a position he has held since September 2007. Prior to joining Owens
Slide 54: Director Bios
Director Bios Our Board of Directors nominated Mr. Shiely for election to our Board of Directors on November 15, 2011. Mr. Shiely currently serves as Chairman Emeritus of Briggs & Stratton Corporation, a producer of air cooled gasoline engines for outdoor power equipment, served as Chairman until Oc
Slide 55: Director Bios
Director Bios Mr. Sim is currently the Managing Partner of Iona Partners LLC, a financial investment company. Additionally, Mr. Sim is a partner in Centaur Forge LLC, a distributor and manufacturer of farrier and blacksmith products, and a director of Rapid Air Systems Inc., a manufacturer of subsys
Slide 56: Director Bios
Director Bios Mr. Szews currently serves as our President and Chief Executive Officer, a position he has held since January 1, 2011. Mr. Szews joined our company in 1996 as Vice President and Chief Financial Officer. He was appointed Executive Vice President in 1997 and President and Chief Operating
Slide 57: Director Bios
Director Bios Gen. (Ret.) Wallace currently acts as an independent consultant to various organizations and businesses serving the U.S. Department of Defense. He served as the Commanding General of the U.S. Army Training and Doctrine Command from 2005 to 2008. Prior to that, he served as the Commandi
Slide 58: Additional Information
Additional Information La MISSION DRIVEN: OSHKOSH 59
Slide 59: Oshkosh ROIC Calculation
Oshkosh ROIC Calculation FYE 30-Sept FY10 FY11 Long-Term Debt (including current maturities) $1,302.3 $1,060.1 Plus: Oshkosh Corporation Shareholder’s Equity 1,326.6 1,596.5 Less: Cash and Cash Equivalents 339.0 428.5 Invested Capital 2011 $2,289.6 $2,228.1 Average Invested Capital $2,258.9 Operatin
Slide 60: Commonly Used Acronyms
Commonly Used Acronyms ARFF Aircraft Rescue and Firefighting MECV Modernized Expanded Capability Vehicle AWP Aerial Work Platform MRAP Mine Resistant Ambush Protected CNG Compressed Natural Gas MSVS Medium Support Vehicle System (Canada) DoD Department of Defense MTT Medium Tactical Truck EAME Europ