Slide 1: Third Quarter 2012 Financial and Operational Results
Third Quarter 2012 Financial and Operational Results October 31, 2012
Slide 2: Forward Looking Statements
Forward Looking Statements Forward-looking statements in this presentation, including statements regarding demand for our products and the economic and other factors that drive that demand, product development plans and timing of those plans, acquisitions, expansion and modernization plans and our e
Slide 3: Financial Summary
Financial Summary Q3 12 vs YTD YTD12 vs Q3 12 2012 Q3 11 YTD11 Net Sales 2,295.0 +9.3% 7,258.8 +16.0% Gross margin 21.4% +197 bps 22.0% +196 bps Adj. op. income* 139.6 +22.1% 574.3 +35.5% Adj. op. margin* 6.1% +64bps 7.9% +112 bps Adj. diluted EPS* $0.96 +$0.09 $4.25 +$1.21 * Reflects adjusted resul
Slide 4: Tractor/Combine Production
Tractor/Combine Production Production Units +5% +12% -4% • Production down 4% in Q3 12 vs. Q3 11 • Full year 2012 production projected to increase ~4% vs. 2011 Q1 Q2 Q3 Q4E 2011 Production 2012 Production 4
Slide 5: Industry Overview
Industry Overview September Year-to-Date Retail Units North America 2012 vs. 2011 Tractors • Industry +7% Combines • Industry (8%) Western Europe 2012 vs. 2011 Tractors • Industry Flat Combines • Industry +3% South America 2012 vs. 2011 Tractors • Industry (2%) Combines • Industry (9%) 5
Slide 6: Regional Net Sales Results
Regional Net Sales Results YTD 2012 $7.3B Q3 12 vs. Q3 11 Net Sales Excluding Currency Translation* North South America America 27% +72% 18% APAC +52% 4% +20% +8% +14% EAME 51% South North EAME APAC Consol. America America YTD 2011 $6.3B YTD 2012 vs. YTD 2011 Net Sales North America Excluding Curren
Slide 7: Net Sales and Operating Margins
Net Sales and Operating Margins Sales Adj. Op. September YTD $M Margin* 10% $574M $2,500 Sales 8% $424M 7.9% $2,000 Adj. Op. Margin* 6.8% Adj. Op. Margin* 6% $1,500 Adj. Op. Inc.* 4% $1,000 2% $500 $0 0% Q311 Q411 Q112 Q212 Q312 2011 2012 * Reflects adjusted results, which exclude restructuring and
Slide 8: GSI Results
GSI Results Sales (YTD Thru September 30, 2012) $606M EAME SA Protein APAC 37% • Contributed ~$0.50 for first nine months of ‘12 • Targeting 2012 EPS accretion of $0.35-$0.40 NA Grain Storage 63% YTD YTD 8
Slide 9: Capital Expenditures – Investing for Growth
Capital Expenditures – Investing for Growth Continuing to Invest 2012 Capex Components ~$375M $300M New Products $237M Capex $207M $167M $141M Dep. & Amort. $129M IT/Other $78M $88M Manufacturing 04 05 06 07 08 09 10 11 12E 9
Slide 10: Free Cash Flow
Free Cash Flow* Full-Year Free Cash Flow YTD Free Cash Flow $426M ● Plant improvements and supplier constraints $127M of A/R Sales drove higher inventory $299M during first nine months ● Targeting $150M+ free $150M+ cash flow in 2012 Sept. Sept. despite increase in YTD 11 YTD 12 Capex $83M ● Repurch
Slide 11: 2012 Market Outlook
2012 Market Outlook Regional Market Outlook – Industry Unit Retail Tractor Sales (Volume in Units) North America South America Western Europe 192K Up ~5% Flat to Down 158K 5% Flat to Down 71K 5% 2011 2012E 2011 2012E 2011 2012E 11
Slide 12: 2012 Forecast Assumptions – Summary
2012 Forecast Assumptions – Summary • Sales growth from pricing, GSI acquisition and market share gains partially offset by negative impact of currency – +3.0% to 3.5% pricing – ~ (7.0%) negative impact of currency translation • 10-15% increase in engineering expense for new product development and
Slide 13: 2012 Outlook
2012 Outlook 2012 Estimates Sales $9.8B-$10.0B Gross margin +100 bps EPS ~$5.20 CAPEX ~$375 Million Free Cash Flow* $150 Million+ * Free cash flow is defined as cash (used in) provided by operating activities less capital expenditures. Please see the reconciliations to GAAP metrics provided in the a
Slide 14: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Free Cash Flow $M Nine Months Nine Months ended ended September 30, September 30, 2012 2011 Net cash (used in) provided by operating activities $ (33.2) $ 270.5 Less: Capital expenditures (235.2) (187.2) Free cash flow $ (268.4) $ 83.3 Note: Free cash flow is defined
Slide 15: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation $M (except per share amts) Nine months ended September 30, 2012 2011 Income Net Income Net From Net Income From Net Income Operations Income(1) Per Operations Income(1) Per Share(1) Share(1) As adjusted $ 574.3 $ 419.6 $ 4.25 $ 423.9 $ 297.6 $ 3.04 Restructuring and o
Slide 16: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Net Sales $M Three Months Ended Change due to currency September 30, translation % change 2012 2011 from 2011 $ % North America $ 632.2 $ 417.7 51.4% $ (2.9) (0.7)% South America 479.9 515.7 (6.9)% (106.5) (20.7)% Europe/Africa/Middle East 1,060.5 1,092.4 (2.9)% (117.
Slide 17: Non-GAAP To GAAP Reconciliation
Non-GAAP To GAAP Reconciliation Net Sales $M Three Months Ended September 30, Change due to acquisitions % change 2012 2011 from 2011 $ % North America $ 632.2 $ 417.7 51.4% $ 130.9 31.3% South America 479.9 515.7 (6.9)% 21.5 4.2% Europe/Africa/Middle East 1,060.5 1,092.4 (2.9)% 30.0 2.7% Asia/Pacif