Greetings, and welcome to the Oshkosh Corporation Reports Results for Third Quarter. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Pat Davidson, Vice President of Investor Relations for Oshkosh Corporation. Mr. Davidson, you may begin.

Thanks, Latonya. Good morning, everybody, and thanks for joining us. Earlier today, we published our third quarter results for fiscal 2011. A copy of the release is available on our website at oshkoshcorporation.com. Today's call is being webcast and is accompanied by a slide presentation, which is also available on our website. The audio replay and slide presentation will be available on our website for approximately 12 months, and please refer now to Slide 2 of that presentation. Our remarks that follow, including answers to your questions, include statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks that could cause actual results to be materially different. These risks include, among others, matters that we have described in our Form 8-K, filed with the SEC this morning, and other filings we make with the SEC. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings conference call, if at all. Presenting today for Oshkosh Corporation will be Charlie Szews, President and Chief Executive Officer; and Dave Sagehorn, Executive Vice President and Chief Financial Officer. Please begin by turning to Slide 3. And I'll turn it over to you, Charlie.

Thank you, Pat. This morning we have 3 objectives. First, we will review our third quarter results; second, we will introduce qualitative guidance on fourth quarter and next fiscal year; and third, we will introduce and explain our new multiyear growth strategy, which is a culmination of a comprehensive 6-month study. This will allow us to explain to you, our shareholders, as well as our employees and customers, how we expect to drive through the uncertainties of the pending U.S. defense spending decline and slow economic recovery to deliver strong returns for shareholders, growth prospects for employees, all while delighting our customers. So let's get started on those objectives. For the quarter, our sales decreased 17% to $2 billion, leading to operating income of $126 million and EPS of $0.75. As was the case during the first 2 quarters of fiscal 2011, lower sales of M-ATVs compared to last year drove the EPS decline. Our Access Equipment segment delivered improved performance, largely due to U.S. rental customers continuing to invest in new equipment to reduce their average fleet age. In fact, JLG's sales to external customers grew 44% compared to the prior-year quarter, resulting in the segment's strongest single quarter for Access Equipment sales in several years. Last quarter, we told you that we plan to triple our daily FMTV production rate by the end of calendar 2011, while we're on track to deliver that schedule by doubling daily production from month end March to month end June to over 20 trucks and about 10 trailers per day. Our team has put forward a phenomenal effort to make this progress. Finally, our defense leadership team has visited our army customer, and it was clear that we are meeting their expectations for this production launch and are delivering an improved, high-quality…

Thanks, Charlie. Consolidated net sales for our third fiscal quarter were $2.0 billion, a 17.1% decrease compared with the same quarter last year. Lower M-ATV-related sales, again, were the largest driver of the decrease, declining $884 million from the prior-year quarter. Partially offsetting this decline were higher FMTV sales, as we continue to ramp up for this program. FMTV sales were more than 15% of Defense segment sales in the quarter. Sales to external customers were up 44% in our Access Equipment segment compared to the third quarter fiscal of 2010. Orders from external customers in this segment were up more than 50% and backlog more than tripled compared to the prior-year quarter. Sales in our Fire & Emergency and Commercial segments were both little changed from prior-year levels. Operating income for the quarter was $126 million or 6.2% of sales compared with $340.5 million or 14% of sales in the prior-year quarter. Lower M-ATV-related sales volume in the Defense segment was the largest driver of the decrease in operating income. FMTV program ramp-up costs, which continued at an unacceptable rate during the quarter and resulted in a larger-than-expected loss on this program of approximately $22 million, also contributed to the lower consolidated operating income. We have dedicated teams and plans to take costs out of this program and believe FMTV sales will be profitable in fiscal 2012. However, if we're not successful in significantly reducing the continued ramp-up-related costs that are driving the current losses, or we do not deliver the targeted material cost savings that we have identified, we may be required to record a material charge for future losses under this program. Results for the quarter also included $5.1 million of restructuring-related expenses in the Access equipment segment, and $3.5 million in the Fire & Emergency segment…

So what should show as we expect beyond fiscal year 12? Well, we're a company of market-leading brands and people driven to serve our customers as well as deliver value for shareholders. That said, we are operating in a very challenging environment. The significant decline anticipated in U.S. defense spending, further decline in municipal spending in fiscal 2011 and projected again for fiscal 2012, combined with a slow recovery in our later-cycle businesses are just too big to overcome in a short period of time. As pressure on the U.S. defense spending intensified during fiscal 2011, and municipal spending continued its downward trend, we launched a strategic study that allowed us to comprehensively challenge all of our operating assumptions and identify opportunities to increase earnings and grow shareholder value. That study confirmed the value of our family of strong brands and validated our strengths in new product development, operations and distribution across specialty vehicle markets. We currently believe that fiscal 2012 will represent a trough earnings year, and the study provides us with a strong roadmap to drive improved operational performance beyond fiscal 2012. It all starts with our purpose. At Oshkosh, we our mission-driven, to move the world at work. This is a simple and succinct representation of our mission statement to serve and delight our customers, as well as to drive superior returns for shareholders. We have 4 primary strategies to support our mission. We characterize them with the word "move." M for market recovery and growth; O for optimize our cost and capital structure; V for valuing innovation; and E for emerging market expansion. Let's start with market recovery and growth. We believe many of our nondefense markets will be in recovery mode after fiscal 2012. Capturing our portion of a realistic market recovery is a large…

Thanks, Charlie. [Operator Instructions] Latonya, please begin the question-and-answer period of this call.

[Operator Instructions] Our first question comes from Charlie Brady with BMO Capital Markets.

On the JLG commentary, on the margin impact from production inefficiencies and supply constraints, can you quantify what the margin hit to that is?

Charlie, it was probably a little bit more than 50 basis points on the quarter, from what we saw in the supply constraints. And as Charlie noted, we did have a number of challenges with that during the quarter, and I guess I would just like to acknowledge the effort by the team at JLG, as well as our global supply chain group in dealing with that. They did a really tremendous job of working through those issues during the quarter, but it did present some challenges.

Just to pick up on that, we had welders on layoff from other segments at our supply base to help them buttress their ability to deliver. So it has been a struggle for component suppliers generally to ramp up for the recovery.

All right. And then on FMTV, you talked about your -- some of the issues with the cost you're in outsourcing, can you quantify the level of outsourcing that's going on there, and kind of where and when you expect to bring it. And then I guess your confidence, what gives you the confidence, you've pushed out the profitability out a quarter, and what gives you the confidence that Q2 is going to be the turn to profitability on that program?

Okay. Today, as we've said on the call, we're still e-coating some items on the outside. We do need to bring that in-house because of long lead times and some of the components to that process. It's going to take us couple of quarters to bring all the e-coating in. We have certain predelivery inspection work that we do on the outside today. We set up a facility on July 11 at Oakland, and that facility is ramping up and will be bringing in in-house more work, and that should occur over the next 1 or 2 quarters. So we have pretty solid plans in place to insource to work. We're making great progress every day, and today, we believe that we will turn this contract to profitability. We have 11 teams working on cost reduction, and we're going to get the job done.

Can you help me understand why production of e-coating is outsourced? Is just the current facility is running full out, or why is it being outsourced?

For one we -- just to give you one example because there are a couple. The iron removal system in this e-coat facility was undersized, and we are waiting for some parts to be able to upgrade that.

Our next question comes from Jamie Cook with Crédit Suisse. Jamie Cook - Crédit Suisse AG: A couple of questions with regards to Defense. One, I mean, you talked about in your commentary, if you're unsuccessful in taking out the cost that you sort of talked about, you talked about taking a material charge for this contract. Can you just talk about the time frame or how we think about the materiality of the charge? And then last, you also talked about still being committed to the Defense business being like a $2 billion, $2.5 billion sort of sustainable revenue business. How should structurally we think about margins longer term given now where FMTV is going? I mean is this -- I guess I was surprised by that mid-single-digit margins in Defense. I mean is getting back to double-digit margins not realistic, I guess, in the next sort of 2 or 3 years? And then I'll get back in queue.

Jamie, it's Dave. I'll start with the question on the FMTV, specifically. That's something that we look at quarterly, and it will really be dependent on the amount of progress that we are making in reducing the costs on that program. So it's premature to say if we needed to take a charge, how much that charge would be. But as Charlie indicated, we are very focused on reducing those costs and believe that we will be profitable in 2012. Jamie Cook - Crédit Suisse AG: But would this be a charge -- I mean, we would know within the next 2 quarters, or what's the timing?

It really again depends. It's something that you look at every quarter. For example, at the end of the third quarter, as we looked ahead, we believe we'll be profitable on it and a charge was not necessary. We'll take a look again every quarter going forward, like we do -- it's really normal course that we do that.

In terms of the margin outlook overall, most defense contractors, their margins are in the high-single digits. Our target will remain to be double-digit in terms of margins, but until we -- in terms of FMTV, the profitability that's going to be the challenge. And then we're going to need to get FMTV up to higher margins. Over time, we are able to do that with the MTVR, the LVSR and other programs, but it didn't happen overnight, it took some effort. I firmly believe we have a team that can get us there over time, and I can tell you that it's our number one priority in the company.

Our next question comes from Jerry Revich with Goldman Sachs.

Charlie, can you talk about your military margin outlook for next year? You've delivered north of 20% margins on M-ATV parts and north of 10% margins on FHTV. So I guess I'm having trouble getting to mid-single-digit margins for this segment if FMTV doesn't lose money next year. Can you help us just bridge the gap there?

Well, we did say in our prepared remarks that FMTV is going to be roughly 40% of sales next year, so that's significant percentage that offsets any other improvements that we have. We also have an adequate mix among different variance of our trucks that we're building next year. So just to take -- give an example, a record margin might have a little different margin than a cargo body type truck, so all of that is kind of in play here.

And, Jerry, we're also seeing mix shift within our aftermarket parts, or at least we expect to see a mix shift there and we have differing margins on those products as well.

Okay. And can you talk about what it would take for the military to let you reengineer parts of the truck to make it more production-friendly? Is that something that might be possible in 2013? Just step us through how those discussions are going, please.

I wouldn't expect that we would have any big opportunities to reengineer the trucks that are going to make a significant difference. Will there be opportunities to make singles or bunts [ph], maybe multiple bunts [ph], to be able to impact our cost structure? Yes, but given the kind of budget issues that the Department of Defense is facing, these bunts [ph] are going to be have to be the type that it's good for Oshkosh, and it's good for the government as well. So we just don't have kind of a budget scenario I think where the government is going to allow major changes to the truck.

And lastly, your Access Equipment customers are getting excellent pricing at this point. I think your guidance assumes relatively muted pricing next year. Can you just talk about what it would take for you to get more aggressive on price increases?

Well, in fact, our price increases went in effect in May in this segment, and we are realizing them today. So I can tell you this, is we're going to continue to watch our cost structure. If there is any escalations in steel or in other costs, we will seek to raise prices to deliver, to toss out at our cost structure. When we are in an environment where we're really constrained in sales by our supply base, I think it poses an environment where we can increase prices as needed.

Our next question comes from Pete Skibitski with SunTrust.

Sensitive area, but can you tell us if you've had talks with Carl Icahn's group at this point?

We really can't comment on that. Of course, we have discussions with shareholders every day, and those are really private discussions, and we don't comment on that.

Is there any intention at this time to study strategic options for the company?

Well, as we said in our remarks, we just spent the last 6 months developing our move plan, our strategy. It was a comprehensive analysis. We looked at every conceivable action that we could take, and we developed a move plan, which we think will deliver shareholder value over time.

Got it. Okay. And just wanted to understand a little bit better on FHTV. Can you tell us how much FHTV is in backlog, and maybe just your revenue expectations for fiscal '12?

Boy, you're going to have to give us a little bit of time here, Pete, on the backlog question. In terms of revenue for next year, we, as indicated in the prepared remarks, we do expect that to decline. We really don't want to get into a program-by-program detail of the build-up right now, but it's a meaningful decline compared to fiscal 2011.

Okay. And do you have the same expectations just kind of overall for your Defense aftermarket volume in fiscal '12?

Yes, Defense aftermarket volume will be down next year, or when I say next year, FY '12 as well. And again, if you recall, we had very significant M-ATV parts sales in the first half of the fiscal year as we were working to complete the original provisioning orders under that program.

Our next question is from Ann Doogan (sic) [Ann Duignan] with JPMorgan. Ann Duignan - JP Morgan Chase & Co: It's Ann Duignan. My first question is around your assumptions that municipal spending or Fire & Emergency and some of the Commercial segments will start to recover in fiscal '13. What gives you confidence that municipalities are going to settle their coffers and indeed start spending on some discretionary items like fire trucks again as soon as '13?

That's a good question. As you can imagine, and during our strategic study, we looked at projections from multiple sources and how the economy would recover. And we've generally adopted a slow recovery scenario in terms of our most likely scenario for the economy. And we just believe that by fiscal year '13 that the municipal coffers will improve enough and the age of their fleet will be long enough that there will be some recovery in the market. Now we didn't say it will be robust in '13. We'll tell you July or August of next year what we think about fiscal year '13, but at this point, we would expect some recovery in our municipal markets by then. Ann Duignan - JP Morgan Chase & Co: Okay. So some slight recovery off of a very low base as opposed to broad-based municipal spending on fire trucks. Is that the way to think about this?

Well, we think there will be some recovery. I can't tell you today if it's slight, modest or significant, but we do think there will be some recovery in FY '13. Ann Duignan - JP Morgan Chase & Co: Yes, because most of our work shows that municipal spending lags actually tax receipt, so they'd have to have a year of better tax receipts first and then start spending a year later.

Yes, we agree. Ann Duignan - JP Morgan Chase & Co: Okay. And secondly, as part of the strategic review, you did say that you explored all options. As I take a step back and I look at things like your SG&A as a percent of sales versus some investments [ph] in plants like PACCAR. You got 150 bps higher of SG&A than, okay, larger scale organizations. Do you really look at a strategic alternative including the sale of the business to larger operators who could bring scale to the business?

Let me first of all comment on SG&A. We have businesses that have SG&A percentages of as low as 2% and then, obviously, some that are higher. So we're overall lean, but when you look at a business that's down 95%, for example, in our concrete mixer business, at some point you have to really struggle to take your SG&A down any lower. And I would argue that we don't have a peer that has some of those kind of downturns they have to contend with. So I think if you look at us over the cycle, our SG&A reach are clearly on the low end across any kind of comparable period that we have, and we still have people today on furloughs, pay cuts. I don't think people comprehend some of the kinds of cuts that we've taken. Having said that, we did say in our remarks that we do expect our costs to be down next year in SG&A at corporate, and we're going to look aggressively at any costs in the company. As far as you talk about options about selling the company, we really don't comment on questions like that. It is our practice to regularly review our businesses and operations to determine how we can drive the most value for our shareholders, but of course, our focus, as always, is doing what's best for shareholders, and we really can't speculate on hypotheticals like that.

Our next question comes from David Raso with ISI Group.

Question on the sequential third to fourth quarter Defense margin. When I think of the FHTV business you thought you're going to have in the fourth quarter, and it's not there, before last quarter we spoke of taking revenues down by $300 million for the whole business, $200 million of which was FHTV. So for the fourth quarter, even if I did give you the $200 million of FHTV, let's say, a 15% margin, and then tacked on another $100 million, maybe there's other FHTV you're going to ship, that would still imply the fourth quarter margins of only 6.7% from 10.2%. I guess if those numbers are close to correct, is the FMTV loss getting a lot greater in the fourth quarter than the third quarter?

No, David. Similar to '12, we are seeing some movement around the makeup of the sales, for example, within the FHTV program in the fourth quarter. As Charlie mentioned, depending on the type of variant, we will have different margins. So from quarter-to-quarter, that may shift some. We're also seeing a different mix in our aftermarket than the third quarter. At least that's what we're expecting today. Those are the other pieces to the puzzle that I think you need to take a look at.

But to be real clear, our per-unit loss in the fourth fiscal quarter, we are projecting it to be lower than in the third quarter.

Just you're making more of a money-losing truck to the absolute dollar; correct?

Well, per truck, we'll do better in the fourth quarter on FMTV than we did in the third quarter.

And what is the sequential production for the whole third quarter versus what you're expecting for the fourth quarter for FMTV?

We expect that it will continue to ramp up in the fourth quarter. I don't have that number right at my fingertips.

Well, in Q3, it's what, a little more than 15% we said; right?

Yes, it will be more, obviously with the movement in FHTV and the increased FMTV volume, it will be a larger percentage of the sales in the fourth quarter.

Right, because for the full year, we've talked about sort of that kind of 10% to 15% range, and we didn't have any in Q1, so there will be some more in Q4.

And just to be clear, you ended the quarter at 20 per day?

We are building a little over 20 per day and about 10 trailers per day.

Our next question comes from Robert McCarthy with Robert W. Baird. Robert McCarthy - Robert W. Baird & Co. Incorporated: I wonder if you could help us non-defense analysts out here understand why you would be potentially faced with booking a charge on the FMTV program? And does that mean -- I mean, if you're forced to recognize some kind of losses upfront capitalize them, does that then mean that from that point forward you'd be reporting a profitable program? Can you help us understand what exactly we're reserving for?

Rob, it's nothing that is Defense contracting specific. It would be similar to any project or long-term contract where you would -- are required to evaluate it to determine whether as you look forward you will be making money on that program. And in the event that our view was such that we did not believe that we would make money, we would take a charge that would, in effect, recognize the loss that we expected to incur over the remaining life of the program. We would record that as we believed that was the case, and then going forward, theoretically, all sales under that program would be at 0 margin. Robert McCarthy - Robert W. Baird & Co. Incorporated: 0 margin. That's very helpful. The other question I wanted to ask has to do with, Charlie, your comments around the international demand for the M-ATV. I understand the timing issue, but you used the word significant as to measure the potential from other international customers. Relative to the UAE order, for example, can you give us an idea of what you mean with what the word "significant"?

Certainly, Rob. We are tracking opportunities that would exceed $1 billion in sales for the M-ATV, but this process is so long and it has so many potential roadblocks in it that we don't have it in our guidance for FY '12. It is possible some could slip into FY '12. It is more likely that if we are able to close on these sales that it would be FY '13.

Our next question comes from Andrew Obin with Bank of America.

Just a clarification, I've seen in your prepared remarks you said that you're committed to $2 billion, $2.5 billion run rate for the Defense business. Can you give us a sense prior to, Iraq and Afghanistan, this business ran at 9% to 10% margin, then it ran in mid-teens now you're telling us mid-single digits. What margin should I apply to this $2 billion, $2.5 billion as I think about it long term?

Well, that's a great question. We're certainly going to target double-digit margins, but as we said before we need to get the FMTV profitable and then we need to raise the margin on that. We're going to be in an interesting environment the next several years, where there are going to be many contractors chasing fewer business opportunities that could impact pricing. Where we feel good is that we do have purchasing power in this space. We have design power in the space and teams dedicated to taking margins up. We have been there before, so all I can say is that it will remain a target.

But is it fair to say that we should expect at least a performance that we've had before, sort of 9%, 10%, is that a fair way of thinking about it?

We're not going to comment anymore than what we've said. It's a target, and we'll just have to let this play out over the next couple of years.

Let me ask another question. How do you guys think about this disconnect, particularly post the strategic review between what seems to be the underlying value of the assets that you have in the company and the stock valuation? And to follow up, what do you guys think you can do near term, you hear about breaking [ph] up the company, to enhance shareholder value?

Well, we're not going to talk about valuation here, but our clear plan is the move plan that we outlined here. First and foremost, the market recovery is significant. We have so many businesses down 40%, others down 90%, 95%. The earnings leverage is significant. The cost takeout that we have opportunities in front of us are also significant. We're going to tackle those with urgency. You have seen a number of actions this year. We were slowed a little bit with the FMTV launch, of really getting after everything we wanted to accomplish, but as we ramp up production and our success, with that we'll have more time and attention to these other cost reduction initiatives. And again, we're going to continue to innovate and go global. So that's where we are.

Our next question comes from Josephine Millward with The Benchmark.

Charlie, can you remind us the FMTV production target rate you're targeting by calendar year end? And how long do you think you'll be producing FMTV at the full rate, full production rate?

Okay. Our target is to be at just below 40 trucks per day and 16 trailers a day by the end of the calendar year. And how long? Well, I think there's a big budget debate occurring right now that's going to determine how long that will be, but it is for a period of time.

Okay. And do you view the Army's MRAP logistics and maintenance contract as an opportunity? Do you have that reflected in your outlook for next year?

Certainly, we see sustainment funding, repairs and maintenance, OLMA [ph] money, all of those are opportunities for us. We are actively engaged in a number of contracts to pursue that. So that clearly is part of our move strategy.

And last question. Can you talk about whether there is a difference in margin in building new heavies versus RECAP since that's how your business is going to be shifting in the coming years?

Historically, our remanufacturing margins have been quite good comparable to our new truck margins.

Our next question will be from Walt Liptak with Barrington Research.

I wanted to ask about the FHTV bridge contract. Can you help me understand the timing of the bridge contract, the dollar amount that you're thinking off and the impacts for 2013?

As we said in our prepared remarks, we don't expect FHTV bridge contract to be finally negotiated and signed until fiscal year '12. It's just a long process particularly with all the things that the Pentagon is working on today. It's difficult to get some of these things finalized, but we do expect that it'll be done. In terms of the size of that contract, it is baked into our overall view of fiscal year '12 sales that we provided to you.

Okay. And, Dave, I wonder you've given more guidance I guess on this call especially on 2012 than you have in the past, I wonder if you could talk a little bit about your cash flow expectations? What kind of debt level you would end the year at?

As we said in our prepared remarks, Walt, that we do anticipate that we will use a modest amount of cash in the next fiscal year. We still are in the budgeting process and won't complete that until -- in the next several months. So until we know or we get through that process, our view right now is just modest cash usage.

Okay. Well, thank you very much for everyone's attention on our call today. We appreciate your participation. America is facing some historic forces. We have the massive federal deficits leading to budget debate, which is out of our control and challenging America's defense industrial base. We do have strapped municipal and state budgets and a slow recovering economy. Oshkosh, those confronting those market for us as much like we did in 1996 and in 2008, 2009 when we powered through the great recession. We dug deep and we delivered. We have leading brands in virtually every business with generally leading margins and growing market shares. We got a great team focused on the right few initiatives to navigate these historic forces. Our move plan focused on significant cost take out, emerging market expansion and innovation to power us through these historic forces until market recovery provides us lift that our entire country seeks. So thank you very much for your support.

This concludes today's teleconference. You may disconnect your lines at this time, and thank you for your participation.