investor presentation june 1, 2017 draft 2 - keybanc...jun 01, 2017 · #1 provider of light,...
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KeyBanc Investor HandoutJune 1, 2017
Oshkosh Corporation (NYSE:OSK)
June 1, 2017KeyBanc Investor Handout 2
Forward-Looking StatementsThis 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 an 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 April 26, 2017. All forward-looking statements speak only as of April 26, 2017. 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.
3
A different integrated global industrial
MOVE – Evolving to deliver more valuePositioned for long-term
success
Oshkosh Corporation Key Messages
June 1, 2017KeyBanc Investor Handout
OSHKOSH CORPORATION100 YEARS STRONG
A DIFFERENT INTEGRATEDGLOBAL INDUSTRIAL
Leading provider of specialty vehicles Celebrating 100 years
in 2017
Focused on delivering value to customers and shareholders
Serial innovator of game-changing new products
ACCESS EQUIPMENT DEFENSE FIRE & EMERGENCY COMMERCIAL
5
Making a Difference
June 1, 2017KeyBanc Investor Handout 5
Leveraging Our Unique Position
6
Diverse End Markets
Leverage Best Attributes of Two Distinct Approaches
Integrated Operations
June 1, 2017KeyBanc Investor Handout
Oshkosh Corporation Profile FY17 YTD*
7
43%Access
Equipment26%
Defense
16%Fire &
Emergency
15%Commercial
Revenue by Segment
79%United States
3%Other NA
12%EMEA
6%Rest of World
Revenue by Geography
June 1, 2017KeyBanc Investor Handout
Revenue growth driven by defense segment - ramp ofJLTV program and international M-ATV shipments
* Through fiscal Q2, ended March 31, 2017
Fire Apparatus
8
Concrete Mixers/Batch Plants
#1
Military Tactical Wheeled Vehicles
Airport Products (ARFF/Snow Removal)
Aerial Work Platforms/Telehandlers
Refuse Collection Vehicles
Maintaining Industry Leadership
Strong Brands Value Creation
Wreckers & Carriers
(1) Company estimates
NORTH AMERICA RANK (1)
#1
#1
#1
#1
#2
GLOBAL RANK (1)
KeyBanc Investor Handout June 1, 2017
#1
Favorable and Diverse End Market Drivers
9
Defense recovery– JLTV ramp-up– Solid U.S. base program funding– International opportunities
U.S. construction slowly improving, though uneven – both residential and non-residential
Municipal spending recovering
Aging fleets in multiple markets
Significant access equipment product adoption opportunities globally– Despite current market challenges
Population growth and urbanization
Expect mid-single-digit FY16 to FY17 revenue growth –despite Access Equipment Segment expected decline
June 1, 2017KeyBanc Investor Handout
Integrated Enterprise Approach Drives Opportunity/Efficiency Across Business Segments
10
Global product development
Enterprise-wide operations
Global procurement and supply chain‒ Leverage scale of OSK
One Oshkosh culture‒ People, Purpose, Performance
Take Advantage of Opportunities Unavailable to Many Companies
June 1, 2017KeyBanc Investor Handout
Continuing to Execute in FY17 – Q2 Summary
Revenue grew 6.2%
Q2 adjusted EPS* of $0.76− Equal to prior year Q2 EPS
− Above Company expectations
Continued positive outlook− Driven by market dynamics, MOVE
strategy and fleet ages
Positive macroeconomic environment and customer sentiment
Increased full year FY17 adjusted EPS* outlook to$3.20 to $3.50
Net Sales(billions) Adjusted EPS
11
OSK Fiscal Q2 Performance
June 1, 2017KeyBanc Investor Handout
$0.76* $0.76
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
FY17 FY16
$1.62$1.52
$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.
MOVE – EVOLVING TO DELIVER MORE VALUE
13
Grow profitably by maintaining intense focus on customer experience
Optimize our costs and capital structure to provide value for customers and shareholders
Lead in innovation over the product life cycle
Drive international growth in targeted geographies
Evolving to Deliver More Value
June 1, 2017KeyBanc Investor Handout
Market Leader Delighting CustomersGrow profitably by maintaining intense focus on customer experience
14
Enhance customer experience by:
Increasing use of standard processes and tools to drive consistent customer experience
Providing total customer caresolutions over product life cycle
Expanding use of AdvancedProduct Quality Planning
Utilizing Voice of Customer to deliver superior products and solutions
June 1, 2017KeyBanc Investor Handout
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Targeting ~$55 million yr/yr cost reduction in FY17
Build on current practices for product, process and overhead improvements‒ Component commonality‒ Supply chain optimization‒ Weight reduction
Incrementally improve margins independent of volume through simplification actions
June 1, 2017KeyBanc Investor Handout
Optimize Cost and Capital Structure Optimize our costs and capital structure to provide value for customers and shareholders
Value InnovationTarget 15 - 20% annual revenue(1) from new products in FY17
Continue innovation leadership
Further development of value/global products
Leverage benefits of multi-generational product and technology plans
(1) Revenues from new products tracked through the first 24 months following the initial sale for all new products and new product development projects
Next generation protection and mobility
JLTV
Game-changing 107 foot two-axle aerial
Ascendant TM Aerial Ladder
Balances high payload, low body weight
JLG 1500AJP Articulating Boom Lift
World’s tallest articulating boom lift
Meridian Front-end Loader RCV
16June 1, 2017KeyBanc Investor Handout
24%
0%
10%
20%
30%
40%
50%
FY16 FY17E
% of OSK Sales Outside U.S.
Emerging Market Growth
17
Drive international growth in targeted geographies
Targeting 15 - 20% increase in international sales in FY17 From $1.5 billion in FY16 to an
estimated $1.75 billion in FY17– Driving international to 25% - 30% of OSK sales
Growth driven by Defense and Access Equipment
Expanding our reach across the globe(1)
25% - 30%
June 1, 2017KeyBanc Investor Handout
24%
BUSINESS SEGMENTOVERVIEW & RECENT HIGHLIGHTS
Access Equipment SummaryTargeting higher operating income margins across the cycle
Global leader in access equipment
Focused strategy built on simplifying the business, continuing to lead in innovation and expanding aftermarket parts and services
Well positioned for long-term global success as near-term headwind of replacement demand cycle becomes a tailwind and product adoption grows
June 1, 2017KeyBanc Investor Handout 19
Access EquipmentRecent Highlights Solid Q2 performance Continued lower North American
replacement demand and challenging pricing environment
U.S. construction indicators generally positive
Continued improving customer sentiment in the U.S.‒ Positive comments at recent trade shows
International market conditions remained mixed
Restructuring actions on track
June 1, 2017KeyBanc Investor Handout 20
Current North America Fleet Replacement Demand Negatively impacted by low sales during last recession…
(1) Rouse Services: Age composition of Access Equipment of “Rouse 8” fleets in North America as of 12/31/2016
… Believe Becomes a Demand Driver in Future Years
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
20162015201420132012201120102009
Model Year of Fleet
Composition of Rental Fleet in 2016 as Percent of Total Units(1)
Current Headwind
June 1, 2017KeyBanc Investor Handout 21
(1) Company estimates
Defense Segment SummaryTargeting high single-digit operating income margins over the next few years
#1 provider of light, medium, MRAP and heavy tactical wheeled vehicles in the world(1)
Winning strategy based on breakthrough technologies, operational agility, life cycle value and defense expertise that delivers exceptional technical, operational and economic value for our military customers
Solid budget visibility for the multi-year, multi-billion dollar U.S. JLTV program, as well as international market potential
June 1, 2017KeyBanc Investor Handout 22
Defense Recent Highlights Solid execution in Q2
JLTV program remains a top priority as manufacturing ramps up to support program testing
Remain busy internationally− M-ATV shipments to Middle East− Continued JLTV marketing
Committed to a strong proposal for FMTV recompete
Monitoring U.S. Defense budget progress
June 1, 2017KeyBanc Investor Handout 23
Joint Light Tactical Vehicle (JLTV)U.S. JLTV Production Contract Overview
~$6.7 billion initial announcement Base award plus 8 order years Program scope includes:
– 4 Mission Package Configurations– Mission Kits– Interim Contractor Support (ICS)– Total Package Fielding (TPF)– System Technical Support (STS)– Technical Data Package
Quantity: 18,000+ vehicles(1)
– Vehicle deliveries expected through 2024
June 1, 2017KeyBanc Investor Handout 24
Utility
2 D
oor
4 D
oor
General Purpose Close Combat Weapons Carrier
Heavy Guns Carrier Future Variants
(1) Source: FY17 U.S. President’s Budget
U.S. JLTV Program Schedule
June 1, 2017KeyBanc Investor Handout 25
FY17 President’s Budget Funding Request
OrderQuantity
Expected SalesQuantity(3)
FY16 804
FY17 2,020 ~650 to 750
FY18(4) 2,637 ~1,500 to 2,000
FY19(4) 4,737 ~3,000
FY20(4) 5,190 ~4,500
FY21(4) 3,838 ~5,000
FY2016 FY2017 FY2018 FY2019 FY2020 FY2021
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Deliveries& Testing
Armor Coupon Testing
Ballistic Testing
LRIP(1) YR 1 LRIP YR 2 LRIP YR 3
FRP(2) YR 1
Performance, Reliability & Live Fire Testing
Full Rate Production Milestone
Delivering unprecedented performance. On-time. On-budget.(1) Low Rate Initial Production(2) Full Rate Production(3) Estimates as of April 26, 2017(4) FY18-FY21 Order Quantity values based on FY18 President's Budget Request
FRP YR 2
Army First Unit Equipped
Marine Corps Fielding Decision
Global Light TWV Market Potential
Today’s HMMWV Installed Base(1)
240,000 HMMWVs
60 countries
30+ configurations
The Oshkosh JLTV Will Shape the History of Light Military Vehicles
53%47%
Armor CapableHMMWVUnarmoredHMMWV
JLTV is Next-Generation Protected Mobility for the Modern Battlefield
HMMWVJeep JLTV
(1) Source: Government publications, IHS Jane’s, SIPRI, AM General Website
June 1, 2017KeyBanc Investor Handout 26
Delivering Long-Term Value HEMTT 1981 2016Heavy Expanded Mobility Tactical Truck 7,491 vehicles 35,000+ vehicles
M-ATV Family of Vehicles 2009 2016Mine Resistant Ambush Protected All-Terrain Vehicle 2,244 vehicles 10,000+ vehicles
HEMTT A2 HEMTT A4 HEMTT Recap
Base UIK Upgrade M-ATV Family of VehiclesRPG Upgrade
HEMTT A0 HEMTT A1 HEMTT Reset
Training
JLTV 2015 2040EJoint Light Tactical Vehicle 16,901 vehicles(1) 55,000+ vehicles(2)
June 1, 2017KeyBanc Investor Handout
(1) Estimate of customer contractual requirements as of initial award date(2) Government stated estimate of quantity – subject to funding and production contract recompete
27
Defense Revenue Expectations
June 1, 2017KeyBanc Investor Handout 28
$0
$1
$2
$3
$4
$5
$6
$7
$8
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17E FY18E FY19E
Net Sales (in billions)
Revenue JLTV Non‐JLTV
Family of Heavy Tactical Vehicles (FHTV)Family of Medium Tactical Vehicles (FMTV)
Joint Light Tactical Vehicle (JLTV)
Medium Tactical Vehicle Replacement (MTVR)Logistics Vehicle System Replacement (LVSR)
Global Integrated Product Support (GIPS) - Aftermarket
U.S. M-ATV Global MRAP All-Terrain Vehicle (M-ATV)
P-19R ARFF
Targeting $1.7 - $2.0
billion of sales in FY17 – FY19
JLTV approaching
~50% of sales by FY19
(1) (1)
(1) Mid-point of revenue range expectations
Fire & Emergency Segment SummaryTargeting double-digit operating income margins in the near term
Leader in U.S. fire truck and global airport products(1) with industry-leading brands, products and distribution network
Strategy focused on operational excellence, simplification and continuing to lead in innovation
Aging fleets, technological changes and steady growth in municipal demand support solid outlook
(1) Aircraft Rescue and Firefighting (ARFF) and Snow Removal
29KeyBanc Investor Handout June 1, 2017
Fire & Emergency Recent Highlights Continued progress toward double digit
operating income margin in Q2 U.S. fire apparatus market expected to
be up modestlyin FY17− Despite annual market volume continuing
to run ~20% below pre-recession levels
Strong fire apparatus orderrate in Q2− Some likely related to price increase timing− Exited Q2 with record segment backlog
Pierce launched multiple new Ascendant configurations at FDIC − Builds on strength of Pierce’s highly
successful new model introduction
June 1, 2017KeyBanc Investor Handout 30
31
Housing prices and local property taxes have continued to recover
Aging fleets coupled with improving state and local tax receipts have led to steady growth in municipal demand
Domestic Fire Truck Market Drivers Gaining Momentum
KeyBanc Investor Handout June 1, 2017
Increasing Home Prices and Property Taxes
1990 1995 2000 2005 2010 2015
32June 1, 2017
Targeting 10% operating income margins over time
Differentiated leader in North American refuse collection vehicle and concrete mixer markets with broad product lineup, operational scale and well-respected brands
Strategy focused on innovation, simplification and supporting customers through the product life cycle
Promising market fundamentals and elevated customer fleet ages drive performance opportunities
KeyBanc Investor Handout
Commercial Segment Summary
Commercial Recent Highlights
Challenging Q2− Lower shipments due to order
slowdown in prior quarter− Adverse absorption− Impact of January accident
Orders rebounded in Q2− Especially RCVs
Strong activity at ConExpo − Positive concrete mixer customer
sentiment, but expectcautiousness to continue
− Multiple new product launches
June 1, 2017KeyBanc Investor Handout 33
Concrete mixers Fleet age is high; ~10 years Customers remain cautious near term North American rear discharge
concrete mixer market still ~25% below long-term average
Home ownership2 up slightly from 50 year low in 2016
RCVs Large operator fleet age >8 years3
Share growth past 2 years Fleet volumes growing due to
increase in waste generation Solid municipal funding as tax
receipts rebound Expect waste hauling market
consolidation to continue
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Concrete Mixers and Refuse Collection VehiclesAged fleets positively correlated with housing and waste generation
June 1, 2017KeyBanc Investor Handout
(1) Source: 2001-2016 National Ready Mixed Concrete Association (NRMCA)(2) U.S. Census Bureau April 2017(3) Estimates based on publicly traded refuse company information and OSK internal estimates (4) Refuse Collection Vehicles 2005 – 2016 WASTEC, single-family housing starts as reported by HIS
-60%
-40%
-20%
0%
20%
40%
-20%-15%-10%
-5%0%5%
10%15%
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
U.S
. RC
V m
arke
t YO
Y C
hang
e
U.S. refuse collection vehicles and single-family housing starts YOY change4
RCV domestic market YOY change
Single Family Housing Starts YOY change
Single-family housing starts YO
Y change
567891011
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Average concrete mixer fleet age¹
Average fleet age in years
POSITIONED FOR LONG-TERM SUCCESS
KeyBanc Investor Handout 36
Responsible Capital Allocation Strategy
Long-term targeted capital
structure
Drives sales and
EPS growth Reinvest in core
business
Invest in external growth (M&A)
Return cash to shareholders
Reduce debt
Hold cash
Debt to EBITDA
target ~2.0X
Opportunistic levers to
drive additional shareholder
value
June 1, 2017
FY17 Estimates* - Growth from FY16
37
Revenues of $6.6 to $6.7 billion
Adjusted operating income** of $415 million to $445 million
Adjusted EPS** of $3.20 to $3.50
Q3 Commentary Expect higher sales vs. prior year
– Higher defense and to a lesser extent fire & emergency segment sales to offset lower access equipment segment sales
Expect higher adjusted EPS vs. prior year– Higher consolidated sales, partially offset by lower
commercial segment operating income– Excludes expected pre-tax impact of additional
access equipment segment restructuring-related costs
Additional expectations Corporate expenses of ~ $145 million Adjusted 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) ~ $2.8 ~ $1.85 ~ $1.0 ~ $0.975
Adj. Operating Income Margin 8.75% - 9.0%** ~ 10.0% ~ 8.5% 5.0% - 5.5%
KeyBanc Investor Handout June 1, 2017
* Estimates as of April 26, 2017
** Non-GAAP results. See appendix for reconciliation to GAAP results.
Positive Long-term OutlookConvergence of favorable market dynamics and benefits of MOVE position OSK to deliver strong results
38June 1, 2017KeyBanc Investor Handout
Favorable market dynamics‒ JLTV provides multi-year visibility
for Defense‒ Current access equipment
replacement demand headwind becomes future tailwind
‒ Fleet ages help to drive Fire & Emergency and Commercial Segment demand
MOVE strategy will continue to drive results
Expected strong free cash flow over the cycle provides capital allocation alternatives
A Different Integrated Global Industrial Company
For informationcontact:
Patrick N. DavidsonVice President, Investor Relations(920) 966‐[email protected]
Jeffrey D. WattDirector, Investor Relations(920) 233‐[email protected]
Appendix: Q2 Consolidated Results
Sales impacted by:+ Higher defense segment sales− Lower access equipment and
commercial segment sales
Adjusted EPS* impacted by:+ Higher defense and fire &
emergency segmentoperating income
+ Lower corporate expenses− Lower access equipment and
commercial segmentoperating income
− Higher prior year discretetax benefits
(Dollars in millions, except per share amounts)
Second Quarter
Net Sales $1,618.3 $1,524.3% Change 6.2% (1.9)%
Adjusted Operating Income $97.6* $91.4
% Change 6.8% (16.7)%% Margin 6.0% 6.0%
Adjusted EPS $0.76* $0.76% Change 0.0% (6.2)%
2017 2016
June 1, 2017KeyBanc Investor Handout 40
Q2 Comments
* Non-GAAP results. See appendix for reconciliation to GAAP results.
Appendix: Q2 Access Equipment Results
June 1, 2017KeyBanc Investor Handout 41
Net Sales $723.2 $754.3% Change (4.1)% (23.2)%
Adjusted Operating Income $59.3* $75.7
% Change (21.7)% (44.7)%% Margin 8.2% 10.0%
Second Quarter2017 2016
(Dollars in millions)
Sales impacted by:− Lower telehandler volume− Competitive pricing+ Higher used equipment and
service sales
Adjusted operating income* impacted by:− Competitive pricing− Higher SG&A costs, including
ConExpo impact
Backlog up 11% vs. prior year to $738 million
Q2 Comments
* Non-GAAP results. See appendix for reconciliation to GAAP results.
Appendix: Q2 Defense Results
Net Sales $446.1 $297.0% Change 50.2% 87.1%
Operating Income $48.7 $27.8% Change 75.2% 333.0%% Margin 10.9% 9.4%
Second Quarter
(Dollars in millions)
2017 2016
June 1, 2017KeyBanc Investor Handout 42
Sales impacted by:+ Ramp-up of JLTV program+ M-ATV international sales
Operating income impacted by:+ Higher sales volume+ Improved manufacturing
absorption− Adverse product mix− Higher incentive compensation
expense
Backlog up 9% vs. prior year to $1.8 billion
Q2 Comments
Appendix: Q2 Fire & Emergency Results
Sales impacted by:− Lower international airport
products volume+ Improved pricing
Operating income impacted by:+ Improved pricing
Backlog up 11% vs. prior year at $1.0 billion
June 1, 2017KeyBanc Investor Handout 43
Net Sales $237.5 $240.4% Change (1.2)% 18.5%
Operating Income $21.8 $14.9% Change 46.3% 66.0%% Margin 9.2% 6.2%
Second Quarter2017 2016
(Dollars in millions)
Q2 Comments
Appendix: Q2 Commercial Results
June 1, 2017KeyBanc Investor Handout 44
Net Sales $216.0 $236.7% Change (8.7)% 7.1%
Operating Income $6.0 $17.2% Change (65.1)% 99.0%% Margin 2.8% 7.3%
Second Quarter2017 2016
(Dollars in millions)
Sales impacted by:− Lower RCV unit volume+ Higher package (third party
chassis) sales
Operating income impacted by:− Lower sales volume− Adverse absorption− Costs related to a manufacturing
facility accident
Backlog up 22% vs. prior year to $354 million
Q2 Comments
June 1, 2017KeyBanc Investor Handout 45
Appendix: Non-GAAP to GAAP Reconciliation
• The table below presents a reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures (in millions, except per share amounts):
Three Months Ended
March 31, 2017
Adjusted diluted earnings per share (Non-GAAP) 0.76$ Restructuring-related costs, net of tax (0.18) Diluted earnings per share (GAAP) 0.58$
Consolidated adjusted operating income (Non-GAAP) 97.6$ Restructuring-related costs (17.2) Consolidated operating income (GAAP) 80.4$
Access equipment segment adjusted operating income (Non-GAAP) 59.3$ Restructuring-related costs (17.2) Access equipment segment operating income (GAAP) 42.1$
June 1, 2017KeyBanc Investor Handout 46
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) 8.75% 9.00%Restructuring-related costs (1.55%) (1.55%)Access equipment operating income margin (GAAP) 7.20% 7.45%
Consolidated adjusted operating income (Non-GAAP) 415.0$ 445.0$ Restructuring-related costs (43.0) (43.0) Consolidated operating income (GAAP) 372.0$ 402.0$
Adjusted effective income tax rate (Non-GAAP) 33.0% 32.5%Impact of restructuring-related costs on effective income tax rate 2.9% 2.9%Effective income tax rate (GAAP) 35.9% 35.4%
Adjusted diluted earnings per share (Non-GAAP) 3.20$ 3.50$ Restructuring-related costs, net of tax (0.50) (0.50) Diluted earnings per share (GAAP) 2.70$ 3.00$
Fiscal 2017 Expectations
June 1, 2017KeyBanc Investor Handout 47
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 110.0$ 160.0$ Additions to property, plant and equipment (100.0) (100.0) Net additions to equipment held for rental (10.0) (10.0) Free cash flow -$ 50.0$
Fiscal 2017 Expectations
Appendix: Commonly Used Acronyms
48June 1, 2017KeyBanc Investor Handout
ARFF Aircraft Rescue and Firefighting LVSR Logistic Vehicle System ReplacementAWP Aerial Work Platform M-ATV MRAP All-Terrain VehicleAMPS Aftermarket Parts & Service MRAP Mine Resistant Ambush ProtectedCapEx Capital Expenditures MSVS Medium Support Vehicle System (Canada)CNG Compressed Natural Gas NOL Net Operating LossDGE Diesel Gallon Equivalent NPD New Product DevelopmentDoD Department of Defense NRC National Rental CompanyEMD Engineering & Manufacturing Development OCO Overseas Contingency OperationsEMEA Europe, Middle East & Africa OH OverheadEPS Diluted Earnings Per Share OI Operating IncomeFAST Act Fixing America’s Surface Transportation Act OOS Oshkosh Operating SystemFDIC Fire Department Instructors Conference OPEB Other Post-Employment BenefitsFHTV Family of Heavy Tactical Vehicles PLS Palletized Load SystemFMS Foreign Military Sales PUC Pierce Ultimate ConfigurationFMTV Family of Medium Tactical Vehicles R&D Research & DevelopmentGAAP U.S. Generally Accepted Accounting Principles RCV Refuse Collection VehicleGAO Government Accountability Office RFP Request for ProposalHEMTT Heavy Expanded Mobility Tactical Truck ROW Rest of WorldHET Heavy Equipment Transporter SMP Standard Military Pattern (Canadian MSVS)HMMWV High Mobility Multi-Purpose Wheeled Vehicle TACOM Tank-automotive and Armaments CommandIRC Independent Rental Company TDP Technical Data PackageIT Information Technology TPV Tactical Protector VehicleJLTV Joint Light Tactical Vehicle TWV Tactical Wheeled VehicleJPO Joint Program Office UCA Undefinitized Contract ActionJROC Joint Requirements Oversight Council UIK Underbody Improvement Kit (for M-ATV)JUONS Joint Urgent Operational Needs Statement UK United KingdomL-ATV Light Combat Tactical All-Terrain Vehicle ZR Zero Radius
LRIP Low Rate Initial Production