Baird's 2014 Industrial Conference
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Transcript of Baird's 2014 Industrial Conference
MOVING THE WORLD AT WORK
Oshkosh Corporation(NYSE:OSK)
Baird’s 2014 Industrial ConferenceNovember 11, 2014
On Track –Driving to FY15 MOVE Targets
MOVING THE WORLD AT WORK
Forward-Looking Statements
211/11/2014Baird's 2014 Industrial Conference
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; the strength of emerging market growth and projected adoption rates of work at height machinery; the expected level and timing of DoD and international defense customer procurement of products and services and funding thereof;risks related to reductions in government expenditures in light of U.S. defense budget pressures, sequestration and an uncertainDoD tactical wheeled vehicle strategy, including the Company’s ability to successfully manage the cost reductions required as a result of lower customer orders in the defense segment; the Company’s ability to win a U.S. JLTV production contract award and international defense contract awards; 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 facilitiesconsolidation 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; 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 foreign currency fluctuations and compliance with the Foreign Corrupt Practices Act; the Company’s ability to comply with complex laws and regulations applicable to U.S. government contractors; the impact of severe weather or natural disasters that may affect the Company, its suppliers or its customers; cyber security 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 October 31, 2014. 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.
MOVING THE WORLD AT WORK
Executing MOVE to TransformOshkosh Corporation
11/11/2014Baird's 2014 Industrial Conference 3
MOVING THE WORLD AT WORK
Oshkosh Corporation
Leading provider of specialty vehicles
– Moving the World at Work
Nearly 100 years in business; incorporated in 1917
Serial innovator of game changing new products
Market Capitalization(1): $3.8 billion
FY14 Revenue: $6.8 billion
Positive outlook
(1) As of October 31, 2014
Access Equipment Defense
Fire & Emergency Commercial
11/11/2014Baird's 2014 Industrial Conference 4
MOVING THE WORLD AT WORK
Outstanding Total Shareholder Returns Compared with “Outsiders”
Source: NYSE March 29,1996 to September 30, 2014
11/11/2014Baird's 2014 Industrial Conference 5
‐500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Mar‐96
Sep‐96
Mar‐97
Sep‐97
Mar‐98
Sep‐98
Mar‐99
Sep‐99
Mar‐00
Sep‐00
Mar‐01
Sep‐01
Mar‐02
Sep‐02
Mar‐03
Sep‐03
Mar‐04
Sep‐04
Mar‐05
Sep‐05
Mar‐06
Sep‐06
Mar‐07
Sep‐07
Mar‐08
Sep‐08
Mar‐09
Sep‐09
Mar‐10
Sep‐10
Mar‐11
Sep‐11
Mar‐12
Sep‐12
Mar‐13
Sep‐13
Mar‐14
Sep‐14
Total R
eturn (%
)
OSK
S&P 500
BRK.A
GD
TDY
MOVING THE WORLD AT WORK
Transforming to a Global IndustrialMoving the World at Work
Revenue growth expected in all non-defense segments– Construction recovery in progress
Global expansion continues Defense is smaller but provides significant upside opportunities
FY15E Sales (1)
FY11 Sales
Defense Non-Defense
Non-Defense Sales Become Significant Majority of Revenue in FY15
FY13 Sales
(1) Based on Company estimates as of October 31, 2014
11/11/2014Baird's 2014 Industrial Conference 6
MOVING THE WORLD AT WORK
What We Said at our 2012 Analyst Day…Target: Doubling EPS from FY12 to FY15
MOVE strategy expected to deliver higher margins throughout the cycle
The recovery from a deep cycle has commenced and is expected to overcome defense downturn
Oshkosh has the processes and team to deliver MOVE
$2.05 to $2.15
$4.00 to $4.50
Oshkosh CorporationEPS Opportunity
23%-30% CAGR
FY12E(1) FY15E
11/11/2014 7Baird's 2014 Industrial Conference
(1) Excludes costs to exit ambulance and European mobile medical businesses
MOVING THE WORLD AT WORK
FY15 Target
FY15 MOVE ScorecardOn Track to Achieve FY15 Adjusted EPS Target Range
(1) Compared with FY12 expectations as of September 2012 Analyst Day.(2) Net of investment costs and compared with consolidated FY11 operating income margins.
Initiative
…Bottom Line Results for Shareholders
FY15Estimate
11/11/2014Baird's 2014 Industrial Conference 8
* Non-GAAP results. See Appendix for reconciliation to GAAP results.
MOVING THE WORLD AT WORK
Capital Allocation Contributing to TSR (1)
Aggressively retiring shares at favorable prices; $605 million allocated to share repurchases in FY13 and FY14
Reinstated dividend with > 1% yield in December 2013; announced 13% increase to dividend in October 2014
(1) Total shareholder returnP = Projected
11/11/2014Baird's 2014 Industrial Conference 9
70
75
80
85
90
95
09/30/12 09/30/13 09/30/14
# Outstanding Shares
(Sha
res in m
illions)
>12% Reduction
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
FY13 FY14 FY15(P)
Annualized Dividend Payment
13% Increase
MOVING THE WORLD AT WORK
Powering our Transformation –The Oshkosh Operating System Customer-centric application
of lean principles– Develops talent to deliver value for
customers
Improves processes needed todeliver key elements of MOVE
Supports drive to improve margins and cash flow
Evolving to deliver more for customers
Company-wide foundation for building shareholder value
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MOVING THE WORLD AT WORK
On the MOVE! Initial FY15 adjusted EPS(*) estimate range of $4.00 - $4.25
supports achievement of 2012 Analyst Day EPS target range
Non-Defense markets expected to remain in slow recovery
Expect to deliver higher operating income margins in non-defense segments in each of next few years
Defense segment continues to offer biggest upside opportunities
Strong free cash flow provides options to enhance returns
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5.0%
7.0%7.5% ~ 8.0%
0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%
FY12 FY13 FY14 FY15E Beyond
Adjusted Operating Income Margins (*)
E = Estimate(*) Non-GAAP results. See Appendix for reconciliation to GAAP results.
MOVING THE WORLD AT WORK
Slow Construction Recovery is Continuing
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Source: U.S. Census Bureau, October 17, 2014 Source: U.S. Census Bureau, November 3, 2014
U.S. Housing Starts ‐ Current Annual Forecasts (millions)Date 2014 2015 2016
Global Insight Aug‐14 1.02 1.30 1.54Moody's ‐ Slower Recovery Oct‐14 1.04 1.27 1.73Portland Cement Association Sep‐14 1.04 1.26 1.53Average Analyst Estimate 1.04 1.27 1.63
400
500
600
700
800
900
1,000
1,100
1,200
Jan‐20
10
Apr‐20
10
Jul‐2
010
Oct‐201
0
Jan‐20
11
Apr‐20
11
Jul‐2
011
Oct‐201
1
Jan‐20
12
Apr‐20
12
Jul‐2
012
Oct‐201
2
Jan‐20
13
Apr‐20
13
Jul‐2
013
Oct‐201
3
Jan‐20
14
Apr‐20
14
Jul‐2
014
Housing Starts
Housing Starts
Thou
sand
s
450
500
550
600
650
Jan‐20
10
Apr‐20
10
Jul‐2
010
Oct‐201
0
Jan‐20
11
Apr‐20
11
Jul‐2
011
Oct‐201
1
Jan‐20
12
Apr‐20
12
Jul‐2
012
Oct‐201
2
Jan‐20
13
Apr‐20
13
Jul‐2
013
Oct‐201
3
Jan‐20
14
Apr‐20
14
Jul‐2
014
U.S. Non‐Residential Spending
$’s in billions
U.S. Nonresidential Construction ‐ Current Analyst EstimatesDate 2014 2015 2016
Portland Cement Association Sep‐14 5.9% 8.7% 9.2%FMI Source Sep‐14 4.0% 6.0% 5.0%Global Insight Sep‐14 4.0% 1.8% 3.9%Moody's Sep‐14 7.2% 5.8% 7.3%Reed Jun‐14 4.0% 8.4%McGraw‐Hill Oct‐14 4.5% 10.8%Average Analyst Estimate 4.9% 6.9% 6.4%
MOVING THE WORLD AT WORK
North American Rental CompaniesRefreshing Fleets, Increasing Penetration
Rental Rate Trends
N.A. Rental Equipment Access - Fleet Age(AWP & TMH)
N.A. Rental Equipment Company Fleet Utilization
Recent Used Equipment Value Trends(OLV)
Source: Rouse Rental Report, October 2014
Based on International Rental News/Dan Kaplan sample of medium to large NA rental equipment companies (United Rentals, RSC, H&E). October 2014
(% T
ime
Util
izat
ion)
OLV
(% o
f Cos
t)
Source: Rouse Rental Report. Calendar year-end data for 2008-13, 2014YTD through July
(Age
in M
onth
s)
Source: Rouse Asset Services, October 2014Note: Rouse rebased the Rouse Value IndexTM in January 2014
40
45
50
55
60
2008 2009 2010 2011 2012 2013 2014YTD
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0.951.001.051.101.151.201.251.301.351.40
Jan‐11
Mar‐11
May‐11
Jul‐1
1
Sep‐11
Nov
‐11
Jan‐12
Mar‐12
May‐12
Jul‐1
2
Sep‐12
Nov
‐12
Jan‐13
Mar‐13
May‐13
Jul‐1
3
Sep‐13
Nov
‐13
Jan‐14
Mar‐14
May‐14
Jul‐1
4
AWP ‐ Telescopic Booms Telehandlers
AWP ‐ Articulating Booms AWP ‐ Scissor Lifts
Rouse Rate Index
10.0
20.0
30.0
40.0
50.0
60.0
Dec 06
Apr 0
7Au
g 07
Dec 07
Apr 0
8Au
g 08
Dec 08
Apr 0
9Au
g 09
Dec 09
Apr 1
0Au
g 10
Dec 10
Apr 1
1Au
g 11
Dec 11
Apr 1
2Au
g 12
Dec 12
Apr 1
3Au
g 13
Dec 13
Apr 1
4Au
g 14
AWP ‐ Articulating Boom AWP ‐ Scissor LiftsAWP ‐ Telescopic Boom Telehandlers
MOVING THE WORLD AT WORK
Mixed Global Market Recovery Will Contribute
Expect slowly improving demand in Europe driven by high fleet ages
Construction healthy in Middle East
Labor shortages, higher wages, shorter lead times and safety initiatives drive access equipment penetration in Asia and Latin America
Global airport construction fuels airport products demand
11/11/2014Baird's 2014 Industrial Conference 15
1
2
3
4
5
2012 2013E 2014F 2015F 2016F
Europe & Central Asia
1
2
3
4
5
2012 2013E 2014F 2015F 2016F
Latin America & Caribbean
(% G
DP
Gro
wth
)
6
7
8
2012 2013E 2014F 2015F 2016F
East Asia & Pacific
(% G
DP
Gro
wth
)(%
GD
P G
row
th)
Source: World Bank Global Economic Prospects, June, 2014
MOVING THE WORLD AT WORK
Operating Income Margin Expansion Remains a Priority
Expect biggest impact years of optimize cost and value innovation initiatives yet to come
11/11/2014Baird's 2014 Industrial Conference 16
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
FY14 FY15E Target
Access Equipment
(Ope
ratin
g In
com
e M
argi
n %
)
16%
17%
~ 15% 14.3%
MOVING THE WORLD AT WORK
Operating Income Margin Expansion Remains a Priority (cont’d)
Optimize cost initiatives continue Absorption benefits accelerate in market recovery
11/11/2014Baird's 2014 Industrial Conference 17
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
FY14 FY15E Target
Commercial
(Ope
ratin
g In
com
e M
argi
n %
)
10%+
~ 6.5% 6.2%
MOVING THE WORLD AT WORK
Operating Income Margin Expansion Remains a Priority (cont’d)
Margin expansion behind schedule, but improvement roadmap is solid
Roadmap to target doesn’t require market recovery
11/11/2014Baird's 2014 Industrial Conference 18
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
FY14 FY15E Target
Fire & Emergency
(Ope
ratin
g In
com
e M
argi
n %
)
10%+
~ 4.25% 3.5%
MOVING THE WORLD AT WORK
Defense Upside Opportunities
Canada MSVS program award decision expected by July 2015
$30 billion JLTV program award decision expected by late July 2015
– DOD projects initial 8 year contract over $9 billion
Continuing pursuit of thousands of M-ATVs
– Middle East and North Africa
– Eastern Europe
– Reset opportunities in U.S.
11/11/2014Baird's 2014 Industrial Conference 19
MOVING THE WORLD AT WORK
MOVE Investments Providing Returns
Additional cost take-out– Focus on product, process
and overhead costs– Dedicated teams leveraging
the Oshkosh Operating System
More innovation coming to market Increased international
orders/sales Recovering demand for
non-defense businesses in North America
11/11/2014Baird's 2014 Industrial Conference 21
MOVING THE WORLD AT WORK
Responsible Capital Allocation
Expect to continue share repurchases Increased dividend by 13% – annualized $0.68 / share beginning December 2014 Increase in capital spending in 2015 to support vertical integration initiatives, new
product launches and information technology improvements
Return capital to shareholders
Re-invest in core business
Invest in external growth
opportunities
Hold cash
Reduce debt
Long-term targeted capital
structure
11/11/2014Baird's 2014 Industrial Conference 22
MOVING THE WORLD AT WORK
Continue to Advance OOS CultureThe OOS Journey
Phase Zero:Exploration
Phase One:Building the foundation
Phase Two:Expanding with tools and deeper thinking
Phase Three:Integration and reinforcement
Phase Four:Building the momentum
11/11/2014 23Baird's 2014 Industrial Conference
From Jamie Flinchbaugh and Andy Carlino, Hitchhiker’s Guide to Lean
MOVING THE WORLD AT WORK
11/11/2014 24Baird's 2014 Industrial Conference
Expectations for FY15• Revenues of $6.5 billion to $6.6 billion• Operating income of $510 million to $540 million• Adjusted EPS* of $4.00 to $4.25
Measure Access Equipment Defense Fire &
Emergency Commercial
Sales(billions) $3.7 - $3.8 ~$1.0 ~$0.80 ~$1.0
Operating Income Margin ~15.0% Slightly above
break even ~4.25% ~6.5%
Segment information
Additional expectations Corporate expenses of $140 - $145 million Refinancing of 8.5% Sr. Notes Tax rate of ~31% CapEx of ~$150 million Free cash flow* ~$200 million Assumes share count of ~80 million
Q1 Commentary Expect EPS lower by ~2/3 vs. Q1 FY14 EPS
Large sales decline and higher NPD spendingin defense segment
Adverse mix and NPD timing in access equipment segment Lower sales volume in fire & emergency segment
Expect significant cash usage driven byseasonal factors
* Non-GAAP results. See Appendix for reconciliation to GAAP results.
MOVING THE WORLD AT WORK
Why Consider Oshkosh? MOVE strategy driving shareholder value
– MOVE initiatives driving margin expansion– Large number of new product launches in FY15
Positive near term outlook– Benefiting from improving housing starts; expect follow on growth in
non-residential construction– Defense provides significant upside opportunities
Expect strong free cash flow generation to provide options
11/11/2014Baird's 2014 Industrial Conference 26
MOVING THE WORLD AT WORK
For informationcontact:
Patrick N. DavidsonVice President, Investor Relations(920) [email protected]
Jeffrey D. WattDirector, Investor Relations(920) [email protected]
11/11/2014 27Baird's 2014 Industrial Conference
MOVING THE WORLD AT WORK
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Consolidated Results(Dollars in millions, except per share amounts)
Fiscal Year Comments
Net Sales $6,808.2 $7,665.1% Change (11.2)% (5.8)%
Adjusted Operating Income** $512.2 $534.8
% Change (4.2)% 32.2%% Margin 7.5% 7.0%
Adjusted EPS** $3.62 $3.74% Change (3.2)% 62.6%
2014 2013* Sales impacted by:‒ Lower defense segment sales
+ Higher access equipment and commercial segment sales
EPS impacted by:‒ Lower defense segment
operating income
+ Higher access equipment segment operating income
+ Impact of FY14 share repurchases
* Continuing operations only.
** Non-GAAP results. See Appendix for reconciliation to GAAP results.
MOVING THE WORLD AT WORK
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Fiscal Year Comments
Appendix: Access Equipment(Dollars in millions)
Net Sales $3,506.5 $3,120.8% Change 12.4% 6.9%
AdjustedOperating Income* $501.1 $388.6
% Change 28.9% 69.6%% Margin 14.3% 12.5%
2014 2013 Sales impacted by: Improved global demand Prior year sales of U.S. military
telehandlers Operating income impacted by:
Higher sales volume Cost reduction initiatives Pricing Higher NPD and operating costs
Backlog up 4.5% vs. prior year to $384 million
* Non-GAAP results. See Appendix for reconciliation to GAAP results.
MOVING THE WORLD AT WORK
11/11/2014Baird's 2014 Industrial Conference 31
Fiscal Year Comments
(Dollars in millions)
2014 2013
Appendix: Defense
Net Sales $1,724.5 $3,049.7% Change (43.5)% (22.8)%
Adjusted Operating Income* $85.3 $228.7
% Change (62.7)% (3.5)%% Margin 4.9% 7.5%
Sales impacted by: Lower sales to U.S. DoD
Operating income impacted by: Lower sales to U.S. DoD
Backlog down 57.6%vs. prior year to $780 million
* Non-GAAP results. See Appendix for reconciliation to GAAP results.
MOVING THE WORLD AT WORK
11/11/2014Baird's 2014 Industrial Conference 32
Fiscal Year Comments
(Dollars in millions)
2014 2013
Appendix: Fire & Emergency
Net Sales $756.5 $792.4% Change (4.5)% 3.1%
Operating Income $26.6 $23.8% Change 11.7% 120.7%% Margin 3.5% 3.0%
Sales impacted by: Lower shipments resulting from
lower production Improved pricing
Operating income impacted by: Improved pricing Lower sales volume
Backlog up 15.2% vs. prior year to $567 million
MOVING THE WORLD AT WORK
11/11/2014Baird's 2014 Industrial Conference 33
Fiscal Year Comments
(Dollars in millions)
2014 2013
Appendix: Commercial
Net Sales $865.9 $766.9% Change 12.9% 10.0%
Operating Income $53.9 $41.3% Change 30.5% 28.8%% Margin 6.2% 5.4%
Sales impacted by: Higher concrete mixer volume Lower intersegment sales
Operating income impacted by: Higher sales volume Investments in MOVE initiatives
Backlog up 13.7% vs. prior year to $160 million
MOVING THE WORLD AT WORK
11/11/2014Baird's 2014 Industrial Conference 34
Appendix: Commonly Used AcronymsARFF Aircraft Rescue and Firefighting MECV Modernized Expanded Capability VehicleAWP Aerial Work Platform 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 CompanyEAME Europe, Africa & Middle East OH OverheadEMD Engineering & Manufacturing Development OI Operating IncomeEPS Diluted Earnings Per Share OOS Oshkosh Operating SystemFHTV Family of Heavy Tactical Vehicles OPEB Other Post-Employment BenefitsFMS Foreign Military Sales PLS Palletized Load SystemFMTV Family of Medium Tactical Vehicles PUC Pierce Ultimate ConfigurationGAAP U.S. Generally Accepted Accounting Principles R&D Research & DevelopmentHEMTT Heavy Expanded Mobility Tactical Truck RCV Refuse Collection VehicleHET Heavy Equipment Transporter RFP Request for ProposalHMMWV High Mobility Multi-Purpose Wheeled Vehicle ROW Rest of WorldIRC Independent Rental Company SMP Standard Military Pattern (Canadian MSVS)IT Information Technology TACOM Tank-automotive and Armaments CommandJLTV Joint Light Tactical Vehicle TDP Technical Data PackageJPO Joint Program Office TPV Tactical Protector VehicleJROC Joint Requirements Oversight Council TWV Tactical Wheeled VehicleJUONS Joint Urgent Operational Needs Statement UCA Undefinitized Contract ActionL-ATV Light Combat Tactical All-Terrain Vehicle UIK Underbody Improvement Kit (for M-ATV)LVSR Logistic Vehicle System Replacement UK United KingdomM-ATV MRAP All-Terrain Vehicle
MOVING THE WORLD AT WORK
11/11/2014Baird's 2014 Industrial Conference 35
Appendix: Non-GAAP to GAAP Reconciliation
• The tables below present 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 earnings per share from continuing operations-diluted (non-GAAP) 4.00$ 4.25$ Debt extinguishment costs, net of tax (0.11) (0.11)Earnings per share from continuing operations-diluted (GAAP) 3.89$ 4.14$
Fiscal 2015 Expectations
Fiscal 2015Expectations
Net cash flows provided by operating activities 368.0$ Additions to property, plant and equipment (150.0) Additions to equipment held for rental (18.0) Free cash flow 200.0$
MOVING THE WORLD AT WORK
11/11/2014Baird's 2014 Industrial Conference 36
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:
Fiscal Year EndedSeptember 30,
2012 2013 2014 2015E
Consolidated operating income margins (non-GAAP) 5.0% 7.0% 7.5% 8.0%Union contract ratification costs - -0.1% - -Performance share valuation adjustment -0.1% - - -Pension curtailment and settlement loss - - -0.1% -OPEB curtailment gain - - 0.2% -Tender offer and proxy contest costs -0.1% -0.2% - -Impairment charge - -0.1% - -Contract pricing adjustment for OPEB costs - - -0.2% -Consolidated operating income margins (GAAP) 4.8% 6.6% 7.4% 8.0%
MOVING THE WORLD AT WORK
11/11/2014Baird's 2014 Industrial Conference 37
Appendix: Non-GAAP to GAAP Reconciliation
• The tables below present a reconciliation of the Company’s presented non-GAAP measures to the most directly comparable GAAP measures (in millions): Fiscal Year Ended
September 30,2014 2013
Adjusted access equipment segment operating income (non-GAAP) $ 501.1 $ 388.6 Intangible asset impairment charge - (9.0)Access equipment segment operating income (GAAP) $ 501.1 $ 379.6
Adjusted defense segment operatingincome (non-GAAP) $ 85.3 $ 228.7
Contract pricing adjustment for OPEB costs (10.7) -OPEB curtailment gain 10.0 -Pension curtailment and settlement loss (8.2) -Union contract ratification costs - (3.8)Defense segment operating income (GAAP) $ 76.4 $ 224.9
Adjusted consolidated operating income (non-GAAP) $ 512.2 $ 534.8 Pension curtailment and settlement loss (8.2) -OPEB curtailment gain 10.0 -Tender offer and proxy contest costs - (16.3)Impairment charge - (9.0)Union contract ratification costs - (3.8)Contract pricing adjustment for OPEB costs (10.7) -Consolidated operating income (GAAP) $ 503.3 $ 505.7
MOVING THE WORLD AT WORK
11/11/2014Baird's 2014 Industrial Conference 38
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:
Fiscal Year EndedSeptember 30,
2014 2013
Adjusted earnings per share from continuingoperations-diluted (non-GAAP) $ 3.62 $ 3.74
Reduction of valuation allowance on netoperating loss carryforward 0.14 -
Debt extinguishment costs, net of tax (0.08) -Contract pricing adjustment for OPEB costs, net of tax (0.08) -OPEB curtailment gain, net of tax 0.07 -Pension curtailment and settlement loss, net of tax (0.06) -Tender offer and proxy contest costs, net of tax - (0.12)
Intangible asset impairment charge, net of tax - (0.06)Union contract ratification costs, net of tax - (0.03)Earnings per share from continuing
operations-diluted (GAAP) $ 3.61 $ 3.53