UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

For the fiscal year ended September 30, 20062007

or

Commission file number:1-31371

Registrant’s telephone number, including area code: (920) 235-9151

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

        Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Section 405 of the Securities Act)

Yes [X] No [   ]

        Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [   ] No [X]

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [   ]

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

[   ]

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. Large accelerated filer [X] Accelerated filer [   ] Non-accelerated filer [   ]

        Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes [   ] No [X]

        At March 31, 2006,2007, the aggregate market value of the Registrant’s Common Stock held by non-affiliates was approximately $4,554,531,003$3,899,599,921 (based on the closing price of $62.24$53.00 per share on the New York Stock Exchange as of such date).

        As of November 13, 2006, 73,775,25119, 2007, 74,213,678 shares of the Registrant’s Common Stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

        Portions of the Proxy Statement for the Annual Meeting of Shareholders to be held on February 6, 20075, 2008 (to be filed with the Commission under Regulation 14A within 120 days after the end of the registrant’s fiscal year and, upon such filing, to be incorporated by reference into Part III).

OSHKOSH TRUCK CORPORATION

FISCAL 20062007 ANNUAL REPORT OF FORM 10-K

TABLE OF CONTENTS

PART I

PART II

PART III

PART IV

        As used herein, the “Company” refers to Oshkosh Truck Corporation, including JLG Industries, Inc. and its wholly-owned subsidiaries (“JLG”), Pierce Manufacturing Inc. (“Pierce”), McNeilus Companies, Inc. (“McNeilus”) and its wholly-owned subsidiaries, Viking Truck and Equipment, Inc. (“Viking”), Kewaunee Fabrications, LLC (“Kewaunee”), Medtec Ambulance Corporation (“Medtec”), JerrDan Corporation (“JerrDan”), Concrete Equipment Company, Inc. and its wholly-owned subsidiary (“CON-E-CO”), London Machinery Inc. and its wholly-owned subsidiary (“London”), Geesink Group B.V., Norba A.B. and Geesink Norba Limited and their wholly-owned subsidiaries (together, the “Geesink Norba Group” or “Geesink”), BAI Brescia Antincendi International S.r.l. and its wholly-owned subsidiary (“BAI”), AKOshkosh Specialty Vehicles, LLC, Aluminum Body Corporation and Prime Medical Manufacturing, LLC and their wholly-owned subsidiaries (together, “AK”“OSV”) and Iowa Mold Tooling Co., Inc. (“IMT”). “Oshkosh” refers to Oshkosh Truck Corporation, not including JLG, Pierce, McNeilus, Viking, Kewaunee, Medtec, JerrDan, CON-E-CO, London, Geesink Norba Group, BAI, AK,OSV, IMT or any other subsidiaries.

        The “Oshkosh^®,” “McNeilus“JLG^®,” “Pierce^®,” “MEDTEC™“MEDTEC^®,” “Jerr-Dan^®,” “BAI™,” “Frontline™,” “SMIT™,” “McNeilus^®,” “CON-E-CO^®,” “London^®,” “BAI™,” “Geesink™,” “Norba™,” “Kiggen™,” “Frontline™,” “AK™,” “IMT^®,” “SMIT™,” “Revolution“SkyTrak^®,” “Atlantic Series Front Loader“Lull^®,” “Toucan^®,” “Liftlux™,” “Revolution^®,” “Command Zone™,” “ALL-STEER^®,” “TAK-4^®,” “Arrow XT™,” “Hawk Extreme^®,” “Hercules™,” “Husky^®,” “Velocity™,” “Impel™,” “Contender^®,” “Smart-Pak^®,” “Auto Reach^®,” “Power Grid^®,” “Sky-Arm^®,” “TerraMax™,” “Lo-Pro^®,” “All-Pro^®,” “Tru-Trof™,” and “ProPulse^®”" trademarks and related logos are trademarks or registered trademarks of the Company. All other product and service names referenced in this document are the trademarks or registered trademarks of their respective owners.

        All references herein to earnings per share refer to earnings per share assuming dilution.

        For ease of understanding, the Company refers to types of specialty vehicles for particular applications as “markets.” When the Company refers to “market” positions, these comments are based on information available to the Company concerning units sold by those companies currently manufacturing the same types of specialty vehicles and vehicle bodies and are therefore only estimates. Unless otherwise noted, these market positions are based on sales in the United States of America. There can be no assurance that the Company will maintain such market positions in the future.

Cautionary Statement About Forward-Looking Statements

        The Company believes that certain statements in “Business” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other statements located elsewhere in this Annual Report on Form 10-K are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this report, 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, including those under the captions “Executive Overview” and “Fiscal 20072008 Outlook” are forward-looking statements. When used in this Annual Report on Form 10-K, 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. In addition, the Company’s expectations for fiscal 20072008 are based in part on certain assumptions made by the Company, which are generally set forth under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Certain Assumptions.” Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in Item 1A of Part I of this report.

        All forward-looking statements, including those under the captions “Executive Overview” and “Fiscal 20072008 Outlook” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” speak only as of November 16, 2006.21, 2007. The Company has adopted a policy that if the Company makes a determination that it expects the Company’s earnings per share for future periods for which projections are contained in this Annual Report on Form 10-K to be lower than those projections, then the Company will publicly disseminate that fact. The Company’s policy also provides that if the Company makes a determination that it expects the Company’s earnings per share for future periods to be at or above the projections contained in this Annual Report on Form 10-K, then the Company does not intend to publicly disseminate that fact. Except as set forth above, the Company assumes no obligation, and disclaims any obligation, to update information contained in this Annual Report on Form 10-K. Investors should be aware that the Company may not update such information until the Company’s next quarterly earnings conference call, if at all.

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PART I

ITEM 1. BUSINESS

The Company

        The Company is a leading designer, manufacturer and marketer of a broad range of specialty commercial,vehicles and vehicle bodies. The Company operates in four segments: access equipment, defense, fire and& emergency and military vehicles under the “Oshkosh” and “Pierce” trademarks; vehicle bodies under the “McNeilus,” “Medtec,” “Jerr-Dan,” “BAI,” “London,” “Geesink,” “Norba,” “Frontline,” “AK,” “SMIT” and “IMT” trademarks; mobile and stationary compactors and transfer stations under the “Kiggen” trademark; portable and stationary concrete batch plants under the “CON-E-CO” and “McNeilus” trademarks; and mobile medical trailers under the “AK” trademark.commercial. Oshkosh began business in 1917 and was among the early pioneers of four-wheel drive technology. In 1981, Oshkosh was awarded the first Heavy Expanded Mobility Tactical Truck (“HEMTT”) contract for the U.S. Department of Defense (“DoD”), and quickly its defense segment developed into the DoD’s leading supplier of severe-duty, heavy-payload tactical trucks. As the leading manufacturer of severe-duty, heavy- and medium-payload tactical trucks for the DoD, the Company manufactures vehicles that perform a variety of demanding tasks such as hauling tanks, missile systems, ammunition, fuel and cargo for combat units. In 1996, the Company began a strategic initiative to shed under-performing assets and to diversify its business by making selective acquisitions in attractive segments of the specialty vehicle and vehicle body markets to complement its defense truck business.

        In September 1996, the Company entered the firefighting apparatus market through the acquisition of Pierce, a domestic market leader in manufacturing and marketing of firefighting vehicles. The Company subsequently expanded into additional emergency response and geographic markets to form its fire & emergency segment. This segment manufactures commercial and custom firefighting vehicles and equipment, aircraft rescue and firefighting (“ARFF”) vehicles, snow removal vehicles, ambulances, wreckers, carriers and other emergency vehicles primarily sold to fire departments, airports, other governmental units and towing companies in the U.S. and abroad; mobile medical trailers sold to hospitals and third party medical service providers in the U.S. and Europe; and broadcast vehicles sold to broadcasters and TV stations in North America and abroad.

        In February 1998, the Company entered the concrete mixer and refuse collection vehicle markets through the acquisition of McNeilus to form its commercial segment. Since that time, the Company has acquired additional businesses serving these markets and other adjacent markets. This segment manufactures rear- and front-discharge concrete mixers, refuse collection vehicles, mobile and stationary compactors and waste transfer units, portable and stationary concrete batch plants and vehicle components sold to ready-mix companies and commercial and municipal waste haulers in North America, Europe and other international markets and field service vehicles and truck-mounted cranes sold to mining, construction and other companies in the U.S. and abroad.

        In December 2006, the Company entered the access equipment market (defined as aerial work platforms and telehandlers) through the acquisition of JLG, the Company’s largest and most recent acquisition, to form its access equipment segment. Founded in 1969, JLG is a leading global producer of access equipment based on gross revenues. The access equipment segment manufactures aerial work platforms and telehandlers used in a wide variety of construction, industrial, institutional and general maintenance applications to position workers and materials at elevated heights. Access equipment customers include equipment rental companies, construction contractors, manufacturing companies, home improvement centers and the U.S. military.

        The result of this diversification and acquisition initiative to date has been an increase in sales from $413 million in fiscal 1996 to $3.43$6.3 billion in fiscal 2006,2007, with earnings from continuing operations increasing from a loss of $.01 per share for fiscal 1996 to earnings of $2.76$3.58 per share infor fiscal 2006.2007.

        As part of the Company’s continuation of its diversification and acquisition strategy, on October 15, 2006 the Company signed a definitive agreement to acquire JLG Industries, Inc. (“JLG”), a global leader in the sale of aerial work platforms and telehandler vehicles, for $28 per share. JLG primarily serves the construction market, with customers such as equipment rental companies, construction contractors and other manufacturing or industrial companies. The JLG portfolio of leading brands –JLG^®, SkyTrak^®, Gradall^® and Lull^® — is renowned for its premium quality, low total cost of ownership and advanced technologies. Total consideration, including transaction costs and assumed debt, is expected to approximate $3.2 billion in cash. The Company intends to finance the transaction with a $3.5 billion senior secured credit facility arranged by Bank of America, N.A. and JPMorgan Chase Bank, N.A. and to refinance most of the Company’s and JLG’s currently outstanding debt. The acquisition has been approved by the Board of Directors of each company and is subject to customary closing conditions, including approval under the Hart-Scott-Rodino Act and similar laws outside the U.S. and the approval by the shareholders of JLG. Assuming completion of the transaction, the Company estimates that its sales will approximate $6 billion in fiscal 2007 and JLG will become the largest of four business segments of the Company. Unless expressly stated, the projections and discussions throughout this document do not include the impact on the Company of the JLG acquisition. See Note 20 to the Notes to Consolidated Financial Statements for further discussion of this pending acquisition.

        As part of the Company’s strategy, the Company has completed the following acquisitions:

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        The Company believes it has developed a reputation for excellent product quality, performance and reliability at low total product life cycle costs in each of the specialty markets in which it participates. The Company has strong brand recognition in its markets and has demonstrated design and engineering capabilities through the introduction of several highly engineered proprietary components that increase the operating performance of the Company’s products. The Company has developed comprehensive product and service portfolios for many of its markets in an effort to become a single-source supplier for its customers, including third-party customer lease financing programs for its fire and& emergency products and certain commercial products through its wholly-owned subsidiary, Oshkosh Equipment Finance, L.L.C., doing business as Oshkosh Capital (“Oshkosh Capital”),; for its access equipment products through its wholly-owned subsidiary, Access Financial Solutions, Inc.; and for certain of its commercial products through the Company’s interest in Oshkosh/McNeilus Financial Services Partnership (“OMFSP”). The

        See Note 20 to the Consolidated Financial Statements for financial information related to the Company’s commercial vehicle lines include refuse vehicle bodies, rear- and front-discharge concrete mixers, all-wheel drive truck chassis, field service vehicles and truck-mounted cranes. The Company’s custom and commercial fire apparatus and emergency vehicles include pumpers, aerial and ladder trucks, tankers, light-, medium- and heavy-duty rescue vehicles, wildland rough terrain response vehicles, wreckers, carriers, aircraft rescue and firefighting (“ARFF”) vehicles, ambulances, snow removal vehicles, homeland security vehicles, broadcast vehicles and mobile medical trailers. As the leading manufacturer of severe-duty, heavy and medium-payload tactical trucks for the DoD, the Company manufactures vehicles that perform a variety of demanding tasks such as hauling tanks, missile systems, ammunition, fuel and cargo for combat units.business segments.

        In December 1998, the Company launched its first medium-payload defense truck upon the award of the Medium Tactical Vehicle Replacement (“MTVR”) base contract for the U.S. Marine Corps from which the Company generated total sales of approximately $1.0 billion during the period from fiscal 2000 through fiscal 2005, when the contract was completed. The Company has been utilizing the MTVR truck platform in defense truck procurement competitions worldwide and has generated multiple contract awards for the MTVR truck platform. The Company expects that U.S. Marine Corps requirements and international demand will keep the MTVR truck in production for several years.-2-

        In June 2006, the DoD awarded Oshkosh a production contract for the Logistics Vehicle System Replacement (“LVSR”) truck and associated manuals, vehicle kits, test support and training for the U.S. Marine Corps. The Company estimates that the firm-fixed-price indefinite-delivery/indefinite-quantity contract has a value of $740.2 million based on a production quantity of 1,592 units over a six-year period. The contract allows the U.S. Marine Corps to purchase up to 1,900 cargo, wrecker and fifth-wheel LVSR variants. The Company expects the first delivery of units under the contract in the fourth quarter of fiscal 2007, with full rate production beginning in fiscal 2008.

Competitive Strengths

        The following competitive strengths support the Company’s business strategy:

        Strong Market PositionsPositions.. The Company has developed strong market positions and brand recognition in its core businesses, which the Company attributes to its reputation for quality products, advanced engineering, innovation, vehicle performance, reliability, customer service and low total product life cycle costs.

        Extensive Distribution CapabilitiesCapabilities.. The Company has established an extensive domestic and international distribution system for specialty vehicles and vehicle bodies tailored to each market. NetworksThe Company utilizes networks of dealers and distributors are utilized in markets characterized by a large, fragmented customer base. The Company employs direct in-house sales and service representatives in markets characterized by a concentrated customer base. In addition, the Company’s access equipment segment sells to independent rental companies to reach its various markets.

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        Flexible and Efficient ManufacturingManufacturing.. Over the past ten11 years, the Company has significantly increased manufacturing efficiencies. The Company believes it has competitive advantages over larger truckvehicle manufacturers in its specialty vehicle markets due to its manufacturing flexibility and custom fabrication capabilities. In addition, the Company believes it has competitive advantages over smaller truckvehicle and truckvehicle body manufacturers due to the Company’s relatively higher volumes of similar products that permit the use of moving assembly lines and allow the Company to leverage purchasing power opportunities across product lines.

        Diversified Product Offering and Customer BaseBase.. The Company’s broad product offerings and target markets serve to diversify its sources of revenues, mitigate the impact of economic cycles and provide multiple platforms for both potential internal growth and acquisitions. For each of the Company’s target markets, the Company has developed or acquired a broad product line to become a single-source provider of vocationalspecialty vehicles, vehicle bodies, parts and service and related products to the Company’s customers.

        Strong Management TeamTeam.. The present management team has successfully executed a strategic repositioning of the Company’s business while significantly improving its financial and operating performance. With each acquisition since 1996, the Company assimilated the management and culture of the acquired company and has introduced, and continues to introduce, new strategies intended to increase sales and use the Company’s expertise in purchasing, engineering and manufacturing to reduce costs.

        Quality Products and Customer ServiceService.. The Company’s products have developed strong brand recognition based on the Company’s commitment to meet the stringent product quality and reliability requirements of its customers and the specialty vehicle and vehicle body markets served.it serves. The Company’s commitment to product quality is exemplified by the ISO 9001 certificationcertification. Most of Oshkosh, Pierce, McNeilus, Kewaunee, BAI, the Geesink Norba Group and the mobile medicalCompany’s facilities of AK.are ISO 9001 certified. The Company also achieves high quality customer service through its extensive service and parts support program, which is available to domestic customers 365 days a year in all product lines throughout the Company’s distribution systems.

        Proprietary ComponentsComponents.. The Company’s advanced design and engineering capabilities have contributed to the development of proprietary, severe-duty components that enhance vehicle performance, reduce manufacturing costs and strengthen customer relationships. These proprietary components include front drive and steer axles, transfer cases, cabs, the ALL-STEER electronic all-wheel steering system, TAK-4 independent suspension, the Sky-Arm articulating aerial platform ladder,Pierce Ultimate Configuration (“PUC”) vehicle configuration, the Hercules and Husky foam systems, the Command Zone embedded diagnostics multiplexing technology, the McNeilus Auto Reach Arm for automated side-loading refuse bodies,collection vehicles, the Geesink Norba Group’s SmartPak compaction system, JerrDan’s vehicle recovery system, JLG’s electronic control system, the Pro-Pulse hybrid electric drive technology and the TerraMax autonomous vehicle navigation system. The Company also has an exclusive license to manufacture and market the Revolution composite concrete mixer drum in North, Central and South America and the Caribbean (the “Americas”) and Europe.Europe and a 20-year license to use certain Caterpillar Inc. (“Caterpillar”) intellectual property in connection with the design and manufacture of Caterpillar-branded telehandler products. The Company believes these proprietary components provide the Company a competitive advantage by increasing its products’ durability, operating efficiency and performance. The integration of many of these components across various product lines also reduces the Company’s costs to manufacture its products compared to manufacturers who simply assemble purchased components.

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Business Strategy

        The Company is focused on increasing its net sales, profitability and cash flow by capitalizing on its competitive strengths and pursuing a comprehensive, integrated business strategy. Key elements of the Company’s business strategy include:

        Focusing on Specialty Vehicle and Vehicle Body MarketsMarkets.. The Company plans to continue its focus on those specialty vehicle and vehicle body markets where it has or can acquire strong market positions and where the Company believes it can leverage synergies in purchasing, manufacturing, technology and distribution to increase sales and profitability. The Company believes the higher sales volumes associated with strong market positions will allow the Company to continue to enhance productivity in manufacturing operations, capitalize on extensive distribution capabilities, fund innovative product development and invest in further expansion. In addition to the Company’s plans to increase its market share and profitability, the Company believes each of the Company’s specialty vehicle and vehicle body markets, both domestically and internationally, exhibit opportunities for further market growth.

        Pursuing Strategic Acquisitions. The Company’s present management team has successfully negotiated and integrated fourteen acquisitions since 1996 that, taken as a whole, have significantly increased the Company’s sales and earnings. The Company expects to close the acquisition of JLG in December 2006. Following an approximately two-year period during which the Company intends to focus on integrating the JLG acquisition and reducing debt, the Company intends to resume its pursuit of strategic acquisitions, both domestically and internationally, to enhance its product offerings and expand its international presence in specialty vehicle and body markets. The Company’s acquisition strategy is focused on opportunities that provide or enhance a full range of products to customers in growing specialty vehicle and body markets where the Company can improve its strong market positions and achieve significant acquisition synergies.

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Introducing New ProductsProducts.. The Company has maintained a strong emphasis on new product development, in recent years, as it seeks to expand sales by leading its core markets in the introduction of new or improved products and new technologies, through internal development, strategic acquisitions or licensing of technology. In fiscal 2006,2007, the Company invested $42.1$75.8 million in development activities for new products and product enhancements. The Company believes it is at the forefront of commercializing emerging technologies that are capable of important changes in customer uses of its products, such as the TerraMax autonomously operated vehicle, ProPulse hybrid-electric drive, Revolution composite concrete mixer drum, Side Loading Vehicle Retriever, PUC vehicle configuration and Velocity and Impel custom fire chassis.

        Tailoring DistributionProviding Superior Quality and Service to Each Market.The Company generally markets a premium product line in each of its markets and seeks to provide superior quality and service in each market to sustain its premium product positioning. Each of its businesses maintains active programs involving customer outreach, design and manufacturing quality and supplier certification to assure superior product quality. Quality metrics are maintained at each business to drive continuous improvement.

        The Company sustains its quality reputation with a strong aftermarket focus. The Company actively tailors distribution and service to each of its domestic and international markets. DealersThe Company utilizes dealers and distributors are utilized in markets characterized by a large, fragmented customer base. Company-ownedThe Company uses its owned or leased facilities and in-house sales representatives are utilized in markets characterized by a concentrated customer base, supplemented by a network of nationwide service representatives. In addition, the Company’s access equipment segment sells to independent rental companies to reach its various markets. The Company believes that this distribution and service model provides frequent contact with customers and timely service at a reasonable cost. Because the Company’s vehicles must be ready to go to war, fight a fire, rescue, clean up, tow, broadcast, build and perform other critical missions, the Company has actively been expanding Company-owned service locations, opening remanufacturing facilities, encouraging dealers to expand service locations and adding roving service vans to maintain high readiness levels of its installed fleets.

        Focusing on Lean Operations.The Company seeks to deliver high performance products to customers at both low total product life cycle costs and low acquisition prices. Historically, the Company has actively benchmarked competitor costs and best industry practices and utilized teams of industrial engineers and procurement specialists to re-engineer manufacturing processes and leverage purchasing volumes to meet these objectives. Since 1996, the Company’s corporate strategic purchasing group has procured approximately 80%two-thirds of all materials and components Company-wide to leverage the Company’s full purchasing power. Beginning in fiscal 2004, the Company adopted a more comprehensive, lean enterprise focus to continue its drive to be a low cost producer in all of its product lines and to deliver low product life cycle costs for its customers. Lean is a methodology to eliminate non-value added work from a process stream. While continuing its benchmarking and best practices analyses, the Company began a worldwide recruiting effort in fiscal 2004 to hire executives with significant lean experience. The Company formed lean executives into teams to train employees in key lean skills such as process value stream mapping and to conduct focused improvement events around the Company to streamline process value streams. In fiscal 2005, the lean teams were primarily focused at Geesink Norba Group and McNeilus’ facilities in an effort to turn around these businesses. In fiscal 2006, the Company expanded its lean initiative with the creation of chartered cost reduction teams at all businesses and the introduction of broad-based training programs. By utilizing teams comprised of individuals with significant lean experience to train the Company’s business units in lean skills, the Company has been able to introduce lean concepts to a number of its businesses. As a result of this lean focus, the Company expects to reduce product costs, manufacturing lead times and new product development cycle times over the next several years.

Pursuing Strategic Acquisitions. The Company’s present management team has successfully negotiated and integrated fifteen acquisitions since 1996 that, taken as a whole, have significantly increased the Company’s sales and earnings. Following the completion of additional integration tasks for the JLG acquisition and planned de-leveraging, in late fiscal 2008 or fiscal 2009, the Company intends to resume its pursuit of strategic acquisitions, both domestically and internationally, to enhance its product offerings and expand its international presence in specialty vehicle and vehicle body markets. The Company’s acquisition strategy is focused on opportunities that provide or enhance the Company’s ability to provide a full range of products to customers in growing specialty vehicle and vehicle body markets where the Company can improve its strong market positions and achieve significant acquisition synergies.

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Products

        The Company is focused on the following core segments of the specialty vehicle and vehicle body markets:

        Access Equipment Segment.In December 2006, through its JLG acquisition, the Company became a leading worldwide manufacturer of a wide range of aerial work platforms, telehandlers, scissor lifts and vertical masts used in a variety of construction, industrial, institutional and general maintenance applications to safely and efficiently position workers and materials at elevated heights that might otherwise have to be reached by scaffolding, ladders, cranes or other means.

        In October 2005, JLG entered into a 20-year strategic alliance (the “Alliance”) with Caterpillar related to the design, manufacture and global sale of Caterpillar-branded telehandlers. JLG’s manufacture and sale of Caterpillar-branded telehandlers commenced in July 2006.

        JLG, through its wholly-owned subsidiary Access Financial Solutions, Inc., also arranges equipment financing and leasing solutions for its customers, primarily through private-label arrangements with independent third party financial companies, and provides credit support in connection with these financing and leasing arrangements. Financing arrangements that JLG offers or arranges through this segment include installment sale contracts, capital leases, operating leases and rental purchase guarantees. Terms of these arrangements vary depending on the type of transaction, but typically range between 36 and 72 months and generally require the customer to be responsible for insurance, taxes and maintenance of the equipment, and to bear the risk of damage to or loss of the equipment.

Defense Segment. The Company has sold products to the DoD for over 80 years. The Company’s proprietary military all-wheel drive product line of heavy-payload tactical trucks includes the HEMTT, the Heavy Equipment Transporter (“HET”), the Palletized Load System (“PLS”), the Common Bridge Transporter (“CBT”) and the Logistic Vehicle System (“LVS”). Beginning with the award of the Medium Tactical Vehicle Replacement (“MTVR”) base contract in fiscal 1998, the Company became a major manufacturer of severe-duty, medium-payload trucks for the U.S. Marine Corps. In fiscal 2005, the Company launched the Medium Tactical Truck (“MTT”) to offer a line of lower-cost severe-duty, medium-payload trucks suitable for less demanding requirements than the MTVR. The Company also exports severe-duty heavy- and medium-payload tactical trucks to approved foreign customers.

        The Company has developed and maintained a strong relationship with the DoD over the years and has established itself as a proven supplier. The Company operates under a one-year, renewable Family of Heavy Tactical Vehicles (“FHTV”) requirements contract with the DoD. The current contract expires in February 2008. The contract includes the following heavy-payload products: HEMTT, HEMTT-ESP (“Extended Service Program”), PLS and PLS Trailer and associated logistics and configuration management support. As of November 19, 2007, the Company was in negotiations to renew this contract for a one-year period. As a result of significant usage of the Company’s heavy-payload trucks in Operation Iraqi Freedom and the Company’s performance under the initial contract, the Company was awarded a five-year follow-on, fixed-price indefinite delivery, indefinite quantity (“ID/IQ”) contract in September 2004 to rebuild Oshkosh heavy-payload defense trucks and trailers deployed in Iraq. As funds become available to the DoD, the ID/IQ allows the DoD to contract with Oshkosh to rebuild Oshkosh defense trucks and trailers at fixed prices over a five-year period ending in September 2009.

        In June 2006, the DoD awarded Oshkosh a production contract for the Logistics Vehicle System Replacement (“LVSR”) vehicle and associated manuals, vehicle kits, test support and training for the U.S. Marine Corps. The Company estimates that this fixed-price, ID/IQ contract has a value of $740.2 million based on a production quantity of 1,592 units over a six-year period. The contract allows for the purchase of up to 1,900 cargo, wrecker and fifth-wheel LVSR variants. The Company delivered the first units under the contract in fiscal 2007 and expects that full scale production will begin in the second half of fiscal 2009.

        In February 2006, the Company entered into a licensing agreement with ADI Limited of Australia (“ADI”), a wholly-owned subsidiary of Thales Group, to allow the Company to manufacture, market and support the Bushmaster armored vehicle for North American customers as well as countries eligible for Foreign Military Sales. The Bushmaster, originally developed by ADI in conjunction with the Australian Defence Force, is a mine-blast resistant vehicle due to its v-shaped hull, and its armor provides improvised explosive device and ballistic protection to its occupants. The vehicle’s mission profile requires it to travel long distances over rough terrain and deliver its occupants to their destination as safely and comfortably as possible, making it more effective in a tactical environment. To date, the Company has been unsuccessful in securing contracts for this vehicle from the DoD, but it continues to market this vehicle to friendly foreign militaries.

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        In July 2007, the Company announced a teaming agreement with Ceradyne, Inc. (“Ceradyne”) and Ideal Innovations, Inc. (“I-3”) to further develop, produce and market the Bull armored vehicle. The Bull is intended to address the increasing need for protection from improvised explosive devices (“IED”), mine blasts and lethal, explosively formed projectiles (“EFP”) and would be built on a combat-proven Oshkosh chassis. The Bull advanced technology armored solution, conceived by I-3 in 2005 and developed with Ceradyne in 2006, has been tested by the Army Test Center, Aberdeen, Md., and was demonstrated to be capable of protecting vehicle occupants against IED, EFP, mine blast and ballistic threats.

        The Company’s objective is to continue to diversify into other areas of the U.S. and international defense truck markets by expanding applications, uses and vehicle body styles of its current heavy- and medium-payload tactical truck lines. As the Company enters tactical truck competitions in the defense market segment, the Company believes it has multiple competitive advantages, including:

Fire and& Emergency SegmentSegment.. Through Pierce, the Company is a leading domestic manufacturer of fire apparatus assembled on custom chassis, designed and manufactured by Pierce to meet the special needs of firefighters. Pierce also manufactures fire apparatus assembled on commercially available chassis, which are produced for multiple end-customer applications. Pierce’s engineering expertise allows it to design its vehicles to meet stringent industry guidelines and government regulations for safety and effectiveness. Pierce primarily serves domestic municipal customers, but also sells fire apparatus to airports, universities and large industrial companies, and in international markets. Pierce’s history of innovation and research and development in consultation with firefighters has resulted in a broad product line that features a wide range of innovative, high-quality custom and commercial firefighting equipment with advanced fire suppression capabilities. In an effort to be a single-source supplier for its customers, Pierce offers a full line of custom and commercial fire apparatus and emergency vehicles, including pumpers, aerial and ladder trucks, tankers, light-, medium- and heavy-duty rescue vehicles, wildland rough terrain response vehicles, mobile command and control centers, bomb squad vehicles, hazardous materials control vehicles and other emergency response vehicles.

        Through BAI, the Company is one of the leaders in manufacturing and marketing fire apparatus and equipment to municipalities and airports throughout Europe, the Middle East and North Africa. BAI produces a wide range of firefighting vehicles, ARFF units, industrial firefighting trucks and forest firefighting trucks.

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        Through JerrDan, the Company is a leader in the manufacturing and marketing of towing and recovery equipment in the U.S. The Company believes JerrDan is recognized as an industry leader in quality and innovation. JerrDan offers a complete line of both roll-back carriers (“carriers”) and traditional tow trucks (“wreckers”). In addition to manufacturing equipment, JerrDan also provides its customers with one-stop service for carriers and wreckers and generates revenue from the installation of equipment, as well as the sale of chassis and service parts.

        Through Medtec, the Company is one of the leading U.S. manufacturers of custom ambulances for private and public transporters and fire departments. Medtec markets a broad line of ambulances for private patient transporters, fire departments and public transporters, but specializes in Type I and Type III ambulances. Type I and Type III ambulances are popular among public patient transporters and fire departments. Type I ambulances feature a conventional style, light- or medium-duty chassis with a modular patient transport body mounted separately behind the truck cab. Type III ambulances are built on light-duty van chassis with a walk-through opening into the patient transport body which is mounted behind the vehicle cab.

        The Company, through its Oshkosh and BAI brands, is among the leaders in sales of ARFF vehicles to domestic and international airports. These highly specialized vehicles are required to be in service at most airports worldwide to support commercial airlines in the event of an emergency. Many of the world’s largest airports, including LaGuardia International Airport, O’Hare International Airport, Hartsfield-Jackson International Airport and Los AngelesDallas/Fort Worth International Airport in the United States and airports located in Montreal and Toronto, Canada, andCanada; Rome and Milan, Italy and Shanghai and Hangzhou, China, are served by the Company’s ARFF vehicles. The Company believes that the performance and reliability of its ARFF vehicles contribute to the Company’s strong position in this market.

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        The Company is a leader in airport snow removal vehicles in the U.S. The Company’s specially designed airport snow removal vehicles can cast up to 5,000 tons of snow per hour and are used by some of the largest airports in the United States, including Denver International Airport, LaGuardia International Airport, Minneapolis-St. Paul International Airport and O’Hare International Airport. The Company believes that the reliability of its high performance snow removal vehicles and the speed with which they clear airport runways contribute to its strong position in this market.

        In July 2006,Through Medtec, the Company becameis one of the leading U.S. manufacturers of custom ambulances for private and public transporters and fire departments. Medtec markets a broad line of ambulances for private patient transporters, fire departments and public transporters, but specializes in Type I and Type III ambulances. Type I and Type III ambulances are popular among public patient transporters and fire departments. Type I ambulances feature a conventional style, light- or medium-duty chassis with a modular patient transport body mounted separately behind the vehicle cab. Type III ambulances are built on light-duty van chassis with a walk-through opening into the patient transport body which is mounted behind the vehicle cab.

        Through OSV, the Company is one of the leaders in the manufacturing of mobile medical vehicles tofor North American and European medical centers and service providers through its AK acquisition. AKproviders. OSV is the only mobile medical vehicle manufacturer certified by all major original equipment manufacturers of mobile medical imaging equipment — General Electric Company, Royal Philips Electronics and Siemens AG. AKOSV is also a leading manufacturer and integrator of custom vehicles for the broadcast and communications industry, where the Company, under its Frontline brand, markets a full line of television broadcast, satellite news gathering and microwave transmission electronic news gathering vehicles to broadcasters, TV stations, radio stations and NASA.

        Through BAI, the Company is one of the leaders in manufacturing and marketing fire apparatus and equipment to municipalities and airports throughout Europe, the Middle East and Africa. BAI produces a wide range of firefighting vehicles, ARFF units, industrial firefighting vehicles and forest firefighting vehicles.

The Company offers two-three- to ten-yearfifteen-year municipal lease financing programs to its fire and& emergency segment customers in the United States through Oshkosh Capital. Programs include competitive lease financing rates, creative and flexible finance arrangements and the ease of one-stop shopping for customers’ equipment and financing. The lease financing transactions are executed through a private label arrangement with an independent third party finance company.

        Defense Segment. The Company has sold products to the DoD for over 80 years. The Company’s proprietary military all-wheel drive product line of heavy-payload tactical trucks includes the HEMTT, the Heavy Equipment Transporter (“HET”), the Palletized Load System (“PLS”), the Common Bridge Transporter (“CBT”) and the Logistic Vehicle System (“LVS”). Beginning with the award of the MTVR base contract in fiscal 1998, the Company became a major manufacturer of severe-duty, medium-payload trucks for the U.S. Marine Corps. In fiscal 2005, the Company launched the Medium Tactical Truck (“MTT”) to offer a line of lower-cost severe-duty, medium-payload trucks suitable for less demanding requirements than the MTVR. The Company also exports severe-duty heavy- and medium-payload tactical trucks to approved foreign customers.

        In April 2003, the Company was awarded a contract to provide the United Kingdom Ministry of Defence (“U.K. MoD”) with 348 wheeled tankers, with a value of approximately 145 million British Sterling over a three-year period, commencing in fiscal 2005. The contract was subsequently amended to include an additional nine wheeled tankers, training and support resulting in a current value of approximately 160 million British Sterling (approximately $250 million) over a three-year period from fiscal 2005 through fiscal 2007. The Company’s contract for the U.K. wheeled tanker utilizes the Company’s high performance MTVR truck as its main truck platform. Sales under the UK wheeled tanker contract totaled $126.3 million and $56.4 million during fiscal 2006 and 2005, respectively. The Company expects to ship the last units under the contract in the first quarter of fiscal 2007.

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        The Company has developed and maintained a strong relationship with the DoD over the years and has established itself as a proven supplier. The Company operated under a Family of Heavy Tactical Vehicles (“FHTV”) requirements contract with the DoD that expires in November 2006. The contract included the following heavy-payload products: HEMTT, HEMTT-ESP (“Expanded Service Program”), HET, PLS and CBT and associated logistics and configuration management support. As of November 16, 2006, the Company was in negotiations to renew this contract for a one-year period with two option years. As a result of significant usage of the Company’s heavy-payload trucks in Operation Iraqi Freedom, the Company was awarded a four-year, fixed-price contract (the “ID/IQ”) on September 30, 2004 to rebuild Oshkosh heavy-payload defense trucks and trailers deployed in Iraq. As funds become available to the DoD, the ID/IQ allows the DoD to contract with Oshkosh to rebuild Oshkosh defense trucks and trailers at fixed prices over a four-year period.

        In June 2006, the DoD awarded Oshkosh a production contract for the LVSR truck and associated manuals, vehicle kits, test support and training for the U.S. Marine Corps. The Company estimates that the firm-fixed-price indefinite-delivery/indefinite-quantity contract has a value of $740.2 million based on a production quantity of 1,592 units over a six-year period. The contract allows for the purchase of up to 1,900 cargo, wrecker and fifth-wheel LVSR variants. The Company expects the first delivery of units under the contract in the fourth quarter of fiscal 2007, with full scale production beginning in fiscal 2008.

        In February 2006, the Company entered into a licensing agreement with ADI Limited of Australia (“ADI”), a wholly-owned subsidiary of Thales Group, to allow the Company to manufacture, market and support the Bushmaster armored vehicle for North American customers as well as countries eligible for Foreign Military Sales. The Bushmaster, originally developed by ADI in conjunction with the Australian Defence Force, is a mine-blast resistant vehicle due to its v-shaped hull, and its armor provides improvised explosive device and ballistic protection to its occupants. The vehicle’s mission profile requires it to travel long distances over rough terrain and deliver its occupants to their destination as safely and comfortably as possible, making them more effective in a tactical environment. The Company is currently working on integrating components currently used on its military logistics vehicles into the Bushmaster. This will increase parts commonality between the Bushmaster and vehicles currently used by the U.S. military, making it easier and less expensive for the U.S. military to supply logistics to a Bushmaster fleet.

        The Company’s objective is to continue to diversify into other areas of the U.S. and international defense truck markets by expanding applications, uses and body styles of its current heavy- and medium-payload tactical truck lines. As the Company enters tactical truck competitions in the defense market segment, management believes that the Company has multiple competitive advantages, including:

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Commercial segmentSegment.. Through McNeilus and the Geesink Norba Group, the Company is a leading North American and European manufacturer of refuse vehicle bodiescollection vehicles for the waste services industry. Through Oshkosh, McNeilus, London and CON-E-CO, the Company is a leading manufacturer of front- and rear-discharge concrete mixers and portable and stationary concrete batch plants for the concrete ready-mix industry throughout the Americas. Through IMT, the Company is a leading North American manufacturer of field service vehicles and truck-mounted cranes for the miningconstruction, equipment dealer, building supply, utility, tire service and constructionmining industries. The Company believes its commercial segment vehicles and equipment have a reputation for efficient, cost effective,cost-effective, dependable and low maintenance operation.

        In March 2002, the Company introduced the rear-discharge Revolution concrete mixer drum, which is constructed of lightweight composite materials. In fiscal 2006, the Company launched the sale of front-discharge Revolution drums. Since the introduction of the first concrete mixer drum about 90 years ago, the Company believes all commercially successful drums worldwide had been produced utilizing steel until the launch of the Revolution. The Company believes the Revolution is the first composite concrete mixer drum ever produced. The Revolution drum offers improved concrete payload on a vehicle and longer drum life, which lowers the cost per yard of concrete delivered. The Company’s strategy has been to sell the Revolution drum as a premium-priced product as the Company believes the Revolution drum yields a quick payback to customers through lower operating costs. The Company is required to pay to its Australian partner royalty fees for each drum sold. The Company has sold over 1,6002,000 Revolution drums in the U.S. since the launch of the Revolution. The ramp-up of the production and sale of Revolution drums has proceeded at a much slower pace than the Company’s initial expectations, as the Company has addressed various technical design and production process control issues.issues, which the Company believes have now been addressed.

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        The Company, through OMFSP, an affiliated financial services partnership, offers three- to seven-year tax advantaged lease financing to concrete mixer and portable and stationarycustomers, concrete batch plant customers and to commercial waste haulers in the United States. Offerings include competitive lease financing rates and the ease of one-stop shopping for customers’ equipment and financing.

Marketing, Sales, Distribution and Service

        The Company believes it differentiates itself from many of its larger competitors by tailoring its distribution to the needs of its specialty vehicle and vehicle body markets and from its smaller competitors with its national and global sales and service capabilities. Distribution personnel use demonstration vehicles to show customers how to use the Company’s vehicles and vehicle bodies properly. In addition, the Company’s flexible distribution is focused on meeting customers on their terms, whether on a jobsite, in an evening public meeting or at a municipality’s offices, compared to the showroom sales approach of the typical dealers of large vehicle manufacturers. The Company backs all products by same-day parts shipment, and its service technicians are available in person or by telephone to domestic customers 365 days a year. The Company believes its dedication to keeping its products in-service in demanding conditions worldwide has contributed to customer loyalty.

        The Company provides its salespeople, representatives and distributors with product and sales training on the operation and specifications of its products. The Company’s engineers, along with its product managers, develop operating manuals and provide field support at vehicle delivery for some markets.

        U.S. dealers and representatives, where used, enter into agreements with the Company that allow for termination by either party generally upon 90 days notice. Dealers and representatives, except for those utilized by JLG, JerrDan, Medtec and IMT, are generally not permitted to market and sell competitive products.

        FireAccess Equipment Segment. JLG’s products are marketed in over 3,500 locations worldwide through independent rental companies and Emergency Segment. The Company believes the geographic breadth, sizedistributors that purchase JLG products and quality of its Pierce fire apparatusthen rent and sell them and provide service support, as well as through other sales and service organizationbranches or organizations in which the Company holds equity positions. North American customers are competitive advantageslocated in a market characterized by a few large manufacturersall 50 states in the U.S., as well as in Canada and numerous small, regional competitors. Pierce’s fire apparatusMexico. International customers are sold through over 30located in Europe, the Asia/Pacific region, Australia, Africa, the Middle East and Latin America. JLG’s sales force is comprised of approximately 180 employees worldwide. In North America, teams of sales employees are dedicated to specific major customers, channels or geographic regions. JLG’s sales employees in Europe and the rest of the world are spread among JLG’s approximately 20 international sales and service organizations with more than 280 sales representatives nationwide, which combine broad geographical reach with frequency of contact with fire departments and municipal government officials. These sales and service organizations are supported by approximately 95 product and marketing support professionals and contract administrators at Pierce. The Company believes frequency of contact and local presence are important to cultivate major, and typically infrequent, purchases involving the city or town council and fire department, purchasing, finance, and mayoral offices, among others, that may participate in a fire apparatus bid and selection. After the sale, Pierce’s nationwide local parts and service capability is available to help municipalities maintain peak readiness for this vital municipal service.offices.

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        The Company markets its Oshkosh branded ARFF vehicles through a combination of three direct sales representatives domestically and 36 representatives and distributors in international markets. Certain of these international representatives and distributors also handle Pierce products. In addition, the Company has 22 full-time sales and service representative and distributor locations with over 40 sales people focused on the sale of snow removal vehicles, principally to airports, but also to municipalities, counties and other governmental entities in the U.S. and Canada. In addition, the Company has opened an office in Beijing, China to support ARFF sales in China and Southeast Asia.

        Medtec sells ambulances through over 20 distributor organizations with more than 75 representatives focused on sales to the ambulance market. Eighteen of these distributor organizations are common to Pierce. JerrDan markets its carriers and wreckers through its worldwide network of 93 independent distributors, supported by JerrDan’s direct sales force. AK markets its mobile medical trailers and broadcast vehicles through 28 in-house sales and service representatives in the U.S and three in-house sales and service representatives in Europe. BAI sells firefighting vehicles and equipment direct in the Italian market. Internationally, BAI has agreements with a limited number of distributors and uses sales agents for “one-off” sales in countries that do not buy in large quantities on a regular basis. Most of BAI’s international distribution is focused in the Middle East, Eastern Europe and North Africa.

        Defense SegmentSegment.. The Company sells substantially all of its domestic defense products directly to principal branches of the DoD. The Company maintains a liaison office in Washington, D.C. to represent its interests with the Pentagon, Congress and the offices of the Executive Branch of the U.S. government. The Company also sells and services defense products to approved foreign governments directly through a limited number of international sales offices, through dealers, consultants and representatives and through the U.S. Foreign Military Sales (“FMS”) program.

        The Company maintains a marketing staff and engages consultants to regularly meet with all branches of the Armed Services, Reserves and National Guard and with representatives of key military bases to determine their vehicle requirements and identify specialty truck variants and apparatus required to fulfill their missions.

        In addition to marketing its current truck offerings and competing for new contracts in the heavy- and medium-payload segment, the Company actively works with the Armed Services to develop new applications for its vehicles and expand its services.

        Logistics services are increasingly important to the DoD, especially following the commencement of Operation Iraqi Freedom. The Company believes that its proven worldwide logistics capabilities and internet-based ordering, invoicing and electronic payment systems have significantly contributed to the expansion of its defense parts and service business since fiscal 2002, following the commencement of Operation Iraqi Freedom. The Company maintains a large parts distribution warehouse in Milwaukee, Wisconsin to fulfill stringent parts delivery schedule requirements, as well as satellite facilities near DoD bases in the U.S., Europe, Asia and the Middle East. The Company has been particularly active in recent years performing maintenance and armoring services at areas near, or in, military conflicts including in the Middle East to support Operation Iraqi Freedom.

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Fire & Emergency Segment. The Company believes the geographic breadth, size and quality of its Pierce fire apparatus sales and service organization are competitive advantages in a market characterized by a few large manufacturers and numerous small, regional competitors. Pierce’s fire apparatus are sold through over 30 sales and service organizations with more than 250 sales representatives nationwide, which combine broad geographical reach with frequency of contact with fire departments and municipal government officials. These sales and service organizations are supported by approximately 70 product and marketing support professionals and contract administrators at Pierce. The Company believes frequency of contact and local presence are important to cultivate major, and typically infrequent, purchases involving the city or town council, fire department, purchasing, finance and mayoral offices, among others, that may participate in a fire apparatus bid and selection. After the sale, Pierce’s nationwide local parts and service capability is available to help municipalities maintain peak readiness for this vital municipal service.

        The Company markets its Oshkosh-branded ARFF vehicles through a combination of three direct sales representatives domestically and 41 representatives and distributors in international markets. Certain of these international representatives and distributors also handle Pierce products. In addition, the Company has 25 full-time sales and service representatives and distributor locations with over 48 sales people focused on the sale of snow removal vehicles, principally to airports, but also to municipalities, counties and other governmental entities in the U.S. and Canada. In addition, the Company has opened an office in Beijing, China to support ARFF sales in China and Southeast Asia.

        Medtec sells ambulances through over 20 distributor organizations with more than 70 representatives focused on sales to the ambulance market. Eighteen of these distributor organizations are common to Pierce. JerrDan markets its carriers and wreckers through its worldwide network of 93 independent distributors, supported by JerrDan’s direct sales force. OSV markets its mobile medical trailers and broadcast vehicles through 28 in-house sales and service representatives in the U.S. and three in-house sales and service representatives in Europe. BAI sells firefighting vehicles and equipment direct in the Italian market. Internationally, BAI has agreements with a limited number of distributors and uses sales agents for “one-off” sales in countries that do not buy in large quantities on a regular basis. Most of BAI’s international distribution is focused in the Middle East, Europe and Africa.

        Commercial SegmentSegment.. The Company operates 20 distribution centers with over 100200 in-house sales and service representatives in the U.S. to sell and service refuse vehicle bodies,collection vehicles, rear- and front-discharge concrete mixers and concrete batch plants. These centers are in addition to sales and service activities at the Company’s manufacturing facilities, and they provide sales, service and parts distribution to customers in their geographic regions. Four of the distribution centers also have paint facilities and provide significant additional paint and mounting services during peak demand periods. Two of the centers also manufacture concrete mixer replacement drums. The Company also uses 18 independent sales and service organizations to market its CON-E-CO branded concrete batch plants. The Company believes this network represents one of the largest concrete mixer, concrete batch plant and refuse collection vehicle body distribution networks in the United States.

        In Canada, the Company operates onetwo distribution centercenters with nine11 outside and in-house sales and service representatives to sell and service its rear-discharge concrete mixers.mixers, refuse collection vehicles and concrete batch plants.

        In Europe, through the Geesink Norba Group, the Company operates 19 distribution centers with 155130 in-house sales and service representatives in nine countries to sell and service its refuse vehicle bodiescollection vehicles and stationary compactors. Two of the centers have paint facilities, and five of the centers provide mounting services. The Company also operates 83100 roving service vans throughout Europe. The Company believes this network represents one of the largest refuse collection vehicle body distribution networks in Europe. The Geesink Norba Group also has sales and service agents in Europe and the Middle East.

        The Company believes its direct distribution to customers is a competitive advantage in concrete and refuse collection vehicle markets, particularly in the U.S. waste services industry where principal competitors distribute through dealers, and to a lesser extent in the ready mix concrete industry, where several competitors and the Company in part use dealers. The Company believes direct distribution permits a more focused sales force in the U.S. refuse body markets,collection vehicle market, whereas dealers frequently offer a very broad and mixed product line, and accordingly, the time dealers tend to devote to refuse bodycollection vehicle sales activities is limited.

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        With respect to distribution, the Company has been applying Oshkosh’s and Pierce’s sales and marketing expertise in municipal markets to increase sales of McNeilus refuse vehicle bodiescollection vehicles to municipal customers. While the Company believes commercial customers represent a majority of the refuse collection vehicle body market, many municipalities purchase their own refuse collection vehicles. The Company believes it is positioned to create an effective municipal distribution system in the refuse collection vehicle body market by leveraging its existing commercial distribution capabilities and by opening service centers in major metropolitan markets.

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        The Company also has established an extensive network of representatives and dealers throughout the Americas for the sale of Oshkosh, McNeilus, CON-E-CO and London concrete mixers, concrete batch plants and refuse bodies.collection vehicles. The Company coordinates among its various businesses to respond to large international tenders with its most appropriate product offering for the tender.

        IMT distributes its products through approximately 85 dealers with a total of 115 locations worldwide, including approximately 15 international dealers. International dealers are primarily located in Central and South America, Australia and Asia and are primarily focused on mining.mining and construction markets. The Company believes this network represents one of the most extensive networks in its market.

Manufacturing

        As of November 16, 2006,21, 2007, the Company manufactures vehicles and vehicle bodies at 4254 manufacturing facilities. To reduce production costs, the Company maintains a continuing emphasis on the development of proprietary components, self-sufficiency in fabrication, just-in-time inventory management, improvement in production flows, interchangeability and simplification of components among product lines, creation of jigs and fixtures to ensure repeatability of quality processes, utilization of robotics, and performance measurement to assure progress toward cost reduction targets. The Company encourages employee involvement to improve production processes and product quality. The Company also intends to adoptis in the process of adopting lean manufacturing management practices across all facilities.

        The Company focuses on achieving targeted synergies with each acquisition. The Company seeks to relocate activities to the lowest cost facilities, install robotic and high speed manufacturing equipment, introduce lean production processes and minimize material handling to enhance the operations of acquired businesses.

        The Company recognizes the importance of maintaining efficient factories to be a low cost producer and to have the capacity needed to meet customer demands. Accordingly, the Company has conducted numerous facility expansions in recent years.

        In fiscal 2005, Oshkosh purchased a 300,000 square foot manufacturing facility near its headquarters in Oshkosh, Wisconsin for $5.5 million. The Company uses the facility for the remanufacturing of defense trucks, many of which are returning from extensive service in Iraq. The Company invested an additional $4.0 million in upgrades in fiscal 2006, including installation of an automated line for blast and paint operations, new cells for component disassembly and refurbishing, new overhead cranes and a dedicated line for vehicle tear down.

        In fiscal 2006, the Company completed construction of an $18.5 million, 130,000 square foot expansion of a Pierce manufacturing facility. This expansion increased Pierce’s capacity to produce rescue vehicles and custom fire chassis by 100% and 50%, respectively.

The Company educates and trains all employees at its facilities in quality principles. The Company encourages employees at all levels of the Company to understand customer and supplier requirements, measure performance, develop systems and procedures to prevent nonconformance with requirements and produce continuous improvement in all work processes. ISO 9001 is a set of internationally accepted quality requirements established by the International Organization for Standardization, whichStandardization. ISO 9001 certification indicates that a company has established and follows a rigorous set of requirements aimed at achieving customer satisfaction by preventing nonconformity in design, development, production, installation and servicing of products. Oshkosh achievedMost of the Company’s facilities are ISO 9001 certification in 1995. Pierce achieved ISO 9001 certification in 1998 and was certified under the new ISO 9001:2000 standards in 2002. The Geesink Norba Group, BAI systems and the mobile medical trailer manufacturing facilities of AK are also ISO 9001 certified. McNeilus achieved ISO 9001:2000 certification in 2003, and Kewaunee achieved ISO 9001:2000 certification in 2004.

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Engineering, Research and Development

        The Company believes its extensive engineering, research and development capabilities have been key drivers of the Company’s marketplace success. In fiscal 2006, the Company took occupancy of a $5.0 million, 45,000 square foot expansion of its Oshkosh new product development facility to support increasing defense and corporate product development projects. The Company maintains fourfive facilities for new product development and testing with a staff of approximately 150300 engineers and technicians who are responsible fordedicated to improving existing products and development and testing of new vehicles, vehicle bodies and components. The Company prepares annual new product development and improvement plans for each of its markets and measures progress against those plans each month.

        Virtually all of the Company’s sales of fire apparatus, broadcast vehicles and mobile medical trailers require some custom engineering to meet the customer’s specifications and changing industry standards. Engineering is also a critical factor in defense truckvehicle markets due to the severe operating conditions under which the Company’s vehicles are utilized, new customer requirements and stringent government documentation requirements. In the access equipment and commercial segment,segments, product innovation is highly important to meet customers’ changing requirements. Accordingly, the Company maintains a permanent staff of over 475 engineers and engineering technicians, and it regularly outsources significant engineering activities in connection with new product development projects.

        For fiscal 2007, 2006 2005 and 2004,2005, the Company incurred engineering, research and development expenditures of $75.8 million, $42.1 million $33.4 million and $27.6$33.4 million, respectively, portions of which were recoverable from customers, principally the U.S. government.

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Competition

        In all of the Company’s segments, competitors include smaller, specialized manufacturers as well as large, mass producers. The Company believes that, in its specialty vehicle and vehicle body markets, it has been able to effectively compete against large, mass producers due to its product quality, flexible manufacturing and tailored distribution systems. The Company believes that its competitive cost structure, strategic global purchasing capabilities, engineering expertise, product quality and global distribution and service systems have enabled it to compete effectively.

        Certain of the Company’s competitors have greater financial, marketing, manufacturing and distribution resources than the Company. There can be no assurance that the Company’s products will continue to compete successfully with the products of competitors or that the Company will be able to retain its customer base or to improve or maintain its profit margins on sales to its customers, all of which could have a material and adverse affect on the Company’s financial condition, results of operations and cash flows.

        Fire and Emergency SegmentAccess Equipment Segment.. The Company produces and sells custom and commercial fire vehicles JLG operates in the U.S. underglobal construction, maintenance, industrial and agricultural equipment markets. JLG’s competitors range from some of the Pierce brand. Competitors include Emergency One,world’s largest multi-national construction equipment manufacturers to small single-product niche manufacturers. Within this global market, competition for sales of aerial work platform vehicles includes Genie Industries, Inc. (a subsidiary of Federal SignalTerex Corporation), Kovatch Mobile Equipment Corp.Haulotte Group, Skyjack Inc. (a subsidiary of Linamar Corporation) and over 20 smaller manufacturers. Global competition for sales of telehandler vehicles includes Genie Industries, Inc. (a subsidiary of Terex Corporation), J C Bamford Excavators Ltd., the Manitou Group, Merlo SpA and over 20 smaller manufacturers. In addition, JLG faces competition from numerous smaller, regional manufacturers.manufacturers of other niche products such as boom vehicles, cherry pickers, skid steer loaders, mast climbers, straight mast and vehicle-mounted fork-lifts, rough-terrain and all-terrain cranes, vehicle-mounted cranes, portable material lifts and various types of material handling equipment that offer functionality that is similar to or overlaps that of JLG’s products. Principal methods of competition include brand awareness, single-source customer solutions, product quality, product innovation dealer distribution,and performance, quality, service and support, product availability and price. The Company believes that its competitive strengths include: recognized, premium brand name; nationwide network of independent Pierce dealers; extensive, high quality and innovative product offeringsthe extent to which includea company offers single-source customer solutions for aerials, pumpers and rescue units; large-scale and high-efficiency custom manufacturing capabilities; and proprietary technologies such as TAK-4 independent suspension, Hercules and Husky foam systems and Command Zone electronics.

        JerrDan produces carriers and wreckers, primarily for sale in the U.S., with limited export sales. JerrDan’s principal competitor is Miller Industries, Inc. Principal methods of competition for carriers and wreckers include product quality and innovation, product performance, price and service.solutions. The Company believes its competitive strengths in this market include its high quality, innovativeinclude: premium brand names; broad and high performancesingle-source product line and its low-cost manufacturing capabilities.

        BAI manufactures firefighting vehicles, ARFF vehicles and related equipment, primarily for the Italian market, with significant export sales into the Middle East, Eastern Europe and North Africa. BAI’s principal competitors include Iveco Eurofire (Holding) GmbH (a subsidiary of Fiat SpA) and Rosenbauer International AG. Principal methods of competition for BAI products includeofferings; product innovation and price. The Company believes its competitive strengths in these markets include its low-cost manufacturing capability, distribution network and innovative products.

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        Medtec is a manufacturer of ambulances. Medtec’s principal competition for ambulance sales is from the Halcore Group, Inc. (owned by TransOcean Capital, Inc.), Wheeled Coach Industries (a subsidiary of Collins Industries, Inc.) and McCoy-Miller, LLC. Principal methods of competition are price,quality; worldwide distribution; service and product quality. The Company believes its competitive strengths in the ambulance market include its high-quality productssupport network; and low-costextensive manufacturing capabilities.

        Oshkosh manufactures ARFF vehicles for sale in the U.S. and abroad. Oshkosh’s principal competitors for ARFF sales are Rosenbauer International AG and Emergency One, Inc. (a subsidiary of Federal Signal Corporation). Oshkosh also manufactures snow removal vehicles, principally for U.S. airports. The Company’s principal competitors for snow removal vehicle sales are Schmidt Equipment & Engineering (a subsidiary of FWD/Seagrave Holdings LP) and Kodiak Northwest, Inc. Principal methods of competition for airport products are product quality and innovation, product performance, price and service. The Company believes its competitive strengths in these airport markets include its high-quality, innovative products and low-cost manufacturing capabilities.

        AK is a manufacturer of mobile medical trailers and broadcast vehicles. AK’s principal competition for mobile medical trailers is from Med Coach, LLC. AK’s principal competition for broadcast vehicles is from Wolf Coach (a subsidiary of L-3 Communication Holdings, Inc.). Principal methods of competition are product quality and availability, price and service. The Company believes its competitive strengths in both of AK’s markets include its high-quality products, excellent relationships with manufacturers of equipment installed in its vehicles and low-cost manufacturing capabilities.

        Defense SegmentSegment.. The Company produces heavy-payload and medium-payload tactical wheeled vehicles for the U.S. and other militaries. Competition for sales of these tactical wheeled vehicles is currently limited to a small number of companies, includingincludes the Man Group plc, Mercedes-Benz (a subsidiary of DaimlerChryslerDaimler AG), The Volvo Group, Stewart & Stevenson Services, Inc. (a subsidiary of Armor Holdings, Inc.) andBAE Systems plc), International Military and Government LLC (a subsidiary of Navistar International Corporation)., Force Protection Inc. and General Dynamics Corp. The principal method of competition in the defense segment involves a competitive bid that takes into account factors as determined by the applicable military, such as price, product performance, product quality, adherence to bid specifications, production capability, past performance and product support. Usually, the Company’s truck systems must also pass extensive testing. The Company believes that its competitive strengths include: strategic global purchasing capabilities leveraged across multiple business segments; extensive pricing/costing and defense contracting expertise; a significant installed base of vehicles currently in use throughout the world; large-scale and high-efficiency manufacturing capabilities; patented and/or proprietary vehicle components such as TAK-4 independent suspension, Oshkosh transfer cases and Command Zone vehicle diagnostics; ability to develop new and improved product capabilities responsive to the needs of its customers; product quality and after-market parts sales and service capabilities.

        Fire & Emergency Segment. The Company produces and sells custom and commercial firefighting vehicles in the U.S. under the Pierce brand. Competitors include Rosenbauer International AG, Emergency One, Inc. (a subsidiary of Federal Signal Corporation), Kovatch Mobile Equipment Corp. and numerous smaller, regional manufacturers. Principal methods of competition include brand awareness, the extent to which a company offers single-source customer solutions, product quality, product innovation, dealer distribution, service and support and price. The Company believes that its competitive strengths include: recognized, premium brand name; nationwide network of independent Pierce dealers; extensive, high-quality and innovative product offerings which include single-source customer solutions for aerials, pumpers and rescue units; large-scale and high-efficiency custom manufacturing capabilities; and proprietary technologies such as the PUC vehicle configuration, TAK-4 independent suspension, Hercules and Husky foam systems and Command Zone electronics.

        Oshkosh manufactures ARFF vehicles for sale in the U.S. and abroad. Oshkosh’s principal competitors for ARFF sales are Rosenbauer International AG and Emergency One, Inc. (a subsidiary of Federal Signal Corporation). Oshkosh also manufactures snow removal vehicles, principally for U.S. airports. The Company’s principal competitor for snow removal vehicle sales is Øveraasen AS. Principal methods of competition for airport products are product quality and innovation, product performance, price and service. The Company believes its competitive strengths in these airport markets include its high-quality, innovative products and low-cost manufacturing capabilities.

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        JerrDan produces carriers and wreckers, primarily for sale in the U.S. and Mexico. JerrDan’s principal competitor is Miller Industries, Inc. Principal methods of competition for carriers and wreckers include product quality and innovation, product performance, price and service. The Company believes its competitive strengths in this market include its high quality, innovative and high-performance product line and its low-cost manufacturing capabilities.

        BAI manufactures firefighting vehicles, ARFF vehicles and related equipment, primarily for the Italian market, with significant export sales into the Middle East, Europe and Africa. BAI’s principal competitors include Iveco Magirus (a subsidiary of Fiat SpA) and Rosenbauer International AG. Principal methods of competition for BAI products include product innovation and price. The Company believes its competitive strengths in these markets include its low-cost manufacturing capability, distribution network and innovative products.

        Medtec is a manufacturer of ambulances, primarily for sale in the U.S. Medtec’s principal competition for ambulance sales is from Halcore Group, Inc. (owned by TransOcean Capital, Inc.), Wheeled Coach Industries (owned by American Industrial Partners) and Marque Inc./McCoy-Miller, LLC. Principal methods of competition are price, service and product quality. The Company believes its competitive strengths in the ambulance market include its high-quality products and low-cost manufacturing capabilities.

        OSV is a manufacturer of mobile medical trailers and broadcast vehicles. OSV’s principal competition for mobile medical trailers is from Med Coach, LLC. OSV’s principal competition for broadcast vehicles is from Wolf Coach (a subsidiary of L-3 Communication Holdings, Inc.). Principal methods of competition are product quality and availability, price and service. The Company believes its competitive strengths in both of OSV’s markets include its high-quality products, excellent relationships with manufacturers of equipment installed in its vehicles and low-cost manufacturing capabilities.

Commercial SegmentSegment.. The Company produces front- and rear-discharge concrete mixers and batch plants in North Americafor the Americas under the Oshkosh, McNeilus, CON-E-CO and London brands. Competition for concrete mixer and batch plant sales is limited to a small number of companies, including Terex Corporation, Continental Manufacturing Co. and Schwing America Inc. Principal methods of competition are service, product features, product quality, product availability and price. The Company believes its competitive strengths include strong brand recognition, large-scale and high-efficiency manufacturing, extensive product offerings, high product quality, a significant installed base of concrete mixers in use in the marketplace and its nation-wide, Company-owned network of sales and service centers.

        McNeilus also produces refuse collection vehicle bodies invehicles for the U.S.Americas. Competitors include The Heil Company (a subsidiary of Dover Corporation) and, LaBrie Equipment Ltd. and New Way (a subsidiary of Scranton Manufacturing Company, Inc.). In Europe, the Geesink Norba Group produces refuse collection bodiesvehicles and compactors under the Geesink, Norba and Kiggen brand names. There are a limited number of European competitors, the largest of which is privately-ownedincluding Ros Roca S.A./Dennis Eagle Ltd. and Faun Umwelttechnik GmbH & Co. The principal methods of competition in the U.S. and Europe are service, product quality, product performance and price. Increasingly, the Company is competing for municipal business and large commercial business in the U.S.Americas and Europe, which is based on lowest qualified bid. The Company believes that its competitive strengths in the U.S.Americas and European refuse collection vehicle markets include strong brand recognition, comprehensive product offerings, a reputation for high quality,high-quality, innovative products, large-scale and high-efficiency manufacturing and extensive networks of Company-owned sales and service centers located throughout the U.S. and Europe.

        IMT is a manufacturer of field service vehicles and truck-mounted cranes for miningthe construction, equipment dealer, building supply, utility, tire service and constructionmining industries. IMT’s principal competition for field service vehicles is from Auto Crane Company (owned by Gridiron Capital), Stellar Industries, Inc., Fleet EquipmentMaintainer Corporation and Auto Crane Company. IMT’s principal competition for truck mounted cranes is from Fassi Group Palfinger AG, Hiab Oy, Stellar Industries,of Iowa, Inc. and Auto Crane Company.other regional companies. Principal methods of competition are product quality, price and service. The Company believes its competitive strengths in both of IMT’s markets include its high-quality products, nationalglobal distribution network and low-cost manufacturing capabilities.

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Customers and Backlog

        Sales to the U.S. government comprised approximately 35.3%23% of the Company’s net sales in fiscal 2006.2007. No other single customer accounted for more than 10.0%10% of the Company’s net sales for this period. A substantial majority of the Company’s net sales are derived from customer orders prior to commencing production.

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        The Company’s backlog as of September 30, 2006 decreased 1.5%2007 increased 66.0% to $1,914.3$3,177.8 million compared to $1,944.1$1,914.3 million at September 30, 2005. Fire and emergency2006. The access equipment segment, which the Company acquired after September 30, 2006, contributed backlog increased 22.2% to $643.0of $854.1 million at September 30, 2006 compared2007. The defense segment backlog increased 82.4% to $526.2$1,554.8 million at September 30, 2005 due to improving domestic municipal markets, market share gains and the inclusion of $44.7 million of backlog related to AK, which was acquired in fiscal 2006. The defense segment backlog decreased 29.0%2007 compared to $852.4 million at September 30, 2006 compareddue to $1,199.9the renewal of the FHTV contract and additional contract funding received in the May 2007 federal supplemental spending bill. The defense segment backlog included $53.9 million related to the LVSR contract. Fire & emergency segment backlog decreased 10.2% to $577.5 million at September 30, 2005 due2007 compared to timing of FHTV contract renewal, continued production under U.K. wheeled tanker contract and a slow-down in sales of parts and services for the DoD. The Company anticipates that its defense segment backlog will rise over the next six months as DoD contracts are executed against recent federal budget bills.$643.0 million at September 30, 2006. Commercial segment backlog increased 92.2%decreased 54.3% to $191.4 million at September 30, 2007 compared to $418.9 million at September 30, 2006 compared to $217.9 million at September 30, 2005. Orders continued to remain strong in North America2006. Prior year fire & emergency and commercial segment backlogs included orders in advance of diesel engine emissions standards changes effective January 1, 2007. Commercial segment backlogs were also impacted by lower residential construction in fiscal 2007. Unit backlog for refuse packerscollection vehicles was up 165.8% domestically.down 68.6% domestically compared to September 30, 2006. Unit backlog for front-discharge and rear-discharge concrete mixers was up 80.4%were down 79.0% and 108.2%80.3%, respectively.respectively, compared to September 30, 2006. Unit backlog for refuse packerscollection vehicles was down 25.0%up 52.4% in Europe as a result of slow order intakebetter demand in the United Kingdom and the return of chassis supply issuesavailability in France. Approximately $22.8 million of the overall increase in commercial segment backlog related to IMT, which the Company acquired in fiscal 2006. Approximately 3.0%9.7% of the Company’s September 30, 20062007 backlog is not expected to be filled in fiscal 2007.2008.

        Reported backlog excludes purchase options and announced orders for which definitive contracts have not been executed. Additionally, backlog excludes unfunded portions of the FHTV, MTVR, ID/IQ and LVSR contracts. As of September 30, 2006, only $25.7 million of the anticipated LVSR contract has been funded and included in backlog. Backlog information and comparisons thereof as of different dates may not be accurate indicators of future sales or the ratio of the Company’s future sales to the DoD versus its sales to other customers.

Government Contracts

        Approximately 35.3%23% of the Company’s net sales for fiscal 20062007 were made to the U.S. government, a substantial majority of which were under long-term contracts and programs in the defense truckvehicle market. Accordingly, a significant portion of the Company’s sales are subject to risks specific to doing business with the U.S. government, including uncertainty of economic conditions, changes in government policies and requirements that may reflect rapidly changing military and political developments, the availability of funds and the ability to meet specified performance thresholds. Long-term contracts may be conditioned upon continued availability of congressional appropriations. Variances between anticipated budget and congressional appropriations may result in a delay, reduction or termination of these contracts.

        The Company’s sales into defense truckvehicle markets are substantially dependent upon periodic awards of new contracts and the purchase of base vehicle quantities and the exercise of options under existing contracts. The Company’s existing contracts with the DoD may be terminated at any time for the convenience of the government. Upon such termination, the Company would generally be entitled to reimbursement of its incurred costs and, in general, to payment of a reasonable profit for work actually performed.

        Under firm fixed pricefirm-fixed-price contracts with the U.S. government, the price paid to the Company is generally not subject to adjustment to reflect the Company’s actual costs, except costs incurred as a result of contract changes ordered by the government. The Company generally attempts to negotiate with the government the amount of increased compensation to which the Company is entitled for government-ordered changes that result in higher costs. If the Company is unable to negotiate a satisfactory agreement to provide such increased compensation, then the Company may file an appeal with the Armed Services Board of Contract Appeals or the U.S. Claims Court. The Company has no such appeals pending. The Company seeks to mitigate risks with respect to fixed pricefixed-price contracts by executing firm fixed pricefirm-fixed-price contracts with a substantial majority of its suppliers for the duration of the Company’s contracts.

        The Company, as a U.S. government contractor, is subject to financial audits and other reviews by the U.S. government of performance of, and the accounting and general practices relating to, U.S. government contracts. Like most large government contractors, the Company is audited and reviewed by the government on a continual basis. Costs and prices under such contracts may be subject to adjustment based upon the results of such audits and reviews. Additionally, such audits and reviews can and have led to civil, criminal or administrative proceedings. Such proceedings could involve claims by the government for fines, penalties, compensatory and treble damages, restitution and/or forfeitures. Under government regulations, a company or one or more of its subsidiaries can also be suspended or debarred from government contracts, or lose its export privileges based on the results of such proceedings. The Company believes based on all available information, that the outcome of all such audits, reviews and proceedings that are now pending will not have a material adverse effect on its financial condition, results of operations or cash flows.

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Suppliers

        The Company is dependent on its suppliers and subcontractors to meet commitments to its customers, and many components are procured or subcontracted on a sole-source basis with a number of domestic and foreign companies. Components for the Company’s products are generally available from a number of suppliers, although the transition to a new supplier may require several months to conclude. The Company purchases chassis components, such as vehicle frames, engines, transmissions, radiators, axles, tires, drive motors, bearings and tires,hydraulic components and vehicle body options, such as cranes, cargo bodies and trailers, from third party suppliers. These body options may be manufactured specific to the Company’s requirements; however, most of the body options could be manufactured by other suppliers or the Company itself. Through reliance on this supply network for the purchase of certain components, the Company is able to reduce many of the preproduction and fixed costs associated with the manufacture of these components and vehicle body options. The Company purchases a large amount of fabrications and outsources certain manufacturing services, each generally from small companies located near its facilities. While providing low-cost services and product surge capability, such companies often require additional management attention during difficult economic conditions or contract start-up. The Company also purchases complete vehicle chassis from truck chassis suppliers in its commercial segment and, to a lesser extent, in its fire and& emergency segment. Increasingly, the Company is sourcing components globally which may involve additional inventory requirements and introduces additional foreign currency exposures. The Company maintains an extensive qualification, on-site inspection, assistance and performance measurement system to control risks associated with reliance on suppliers. The Company occasionally experiences problems with supplier and subcontractor performance and availability and must identify alternate sources of supply and/or address related warranty claims from customers.

        While the Company purchases many costly components such as chassis, engines, transmissions and axles, it manufactures certain proprietary components. These components include the Revolution composite concrete mixer drum, front drive and steer axles, transfer cases, cabs, the ALL-STEER electronic all-wheel steering system, TAK-4 independent suspension the Sky-Arm articulating aerial ladder,system, the McNeilus Auto Reach arm, the Hercules compressed air foam system, the Command Zone vehicle control and diagnostic system technology, body structures and many smaller parts which add uniqueness and value to the Company’s products. The Company believes internal production of these components provides a significant competitive advantage and also serves to reduce the manufacturing costs of the Company’s products.

        A surge in over-the-road truck sales has created shortages of certain components utilized by the Company, especially certain engines utilized in the Company’s defense business. The shortages have also caused periodic delays or limitations on the receipt of chassis scheduled for mounting of the Company’s truck bodies across both its fire and emergency and commercial segments. It is likely that some or all of such shortages could diminish during fiscal 2007 due to new diesel engine emissions standards taking effect on January 1, 2007, but such conditions could re-occur later in fiscal 2007 or fiscal 2008 as customers resume their normal procurement patterns.

Intellectual Property

        Patents and licenses are important in the operation of the Company’s business, as one of management’s key objectives is developing proprietary components to provide the Company’s customers with advanced technological solutions at attractive prices. The Company holds in excess of 200550 active domestic and foreign patents. The Company believes patents for all-wheel steer andthe TAK-4 independent suspension systems,system, which have remaining lives of 3 to 1413 years, provide the Company with a competitive advantage in the fire and& emergency segment. In the defense segment, the TAK-4 independent suspension system was added to the U.S. Marine Corps’ MTVR and LVSR programs, which the Company believes provided a performance and cost advantage in the successful competition for the production contracts. The TAK-4 independent suspension is also integral to the Company’s strategy with respect to several international defense bids. The Company believes that patents for certain components of its ProPulse hybrid electric drive system, and Command Zone electronics and TerraMax autonomous vehicle systems offer potential competitive advantages to product lines across all its segments. To a lesser extent, other proprietary components provide the Company a competitive advantage in the Company’s segments.

        In fiscal 2002, the Company introduced the Revolution composite concrete mixer drum in the U.S. The Company has purchased exclusive, renewable licenses for the rights to manufacture and market this technology in the Americas and Europe. This license requires the Company to make royalty fee payments to its Australian partner for each Revolution drum sold. The Company believes that this license createsthese licenses create an important competitive advantage over competitors that manufacture steel concrete mixer drums. The Revolution composite drum is substantially lighter than a comparable steel drum permitting greater payload capacity and is easier to clean, which together lower the cost of delivered concrete. The Company sells the Revolution composite drum at prices substantially higher than prices for steel drums.

-14-        As part of the Company’s 20-year alliance with Caterpillar, the Company acquired a non-exclusive, non-transferable worldwide license to use certain Caterpillar intellectual property through 2025 in connection with the design and manufacture of Caterpillar’s current telehandler products. Additionally, Caterpillar assigned to JLG certain patents and patent applications relating to the Caterpillar-branded telehandler products.

        The Company holds trademarks for “Oshkosh,” “JLG,” “SkyTrak,” “Lull,” “Toucan,” “Pierce,” “McNeilus,” “Revolution,” “Medtec,” “Jerr-Dan,” “CON-E-CO,” “London,” “BAI,” “Geesink,” “Norba,” “Kiggen,” “Frontline,” “AK,” “SMIT” and “IMT” among others. These trademarks are considered to be important to the future success of the Company’s business.

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Employees

        As of September 30, 2006,2007, the Company had 9,387approximately 14,200 employees. The United Auto Workers union (“UAW”) union represented 1,516approximately 1,875 production employees at the Company’s Oshkosh, Wisconsin facilities,facilities; the Boilermakers, Iron Shipbuilders, Blacksmiths, and Forgers Union (“Boilermakers”) represented 235approximately 250 employees at the Company’s Kewaunee, Wisconsin facilities,facilities; and the International Brotherhood of Teamsters Union (“Teamsters”) represented 52approximately 50 employees at the Company’s Garner, Iowa facilities .facilities. The Company’s five-year agreement with the UAW union extends through September 2011, and the Company’s agreement with the Boilermakers union extends through May 2008. The Company’s three-year agreement with the Teamsters extends through October 2008. In addition, the Canadian Auto Workers union represented 88approximately 60 employees at London, and 742approximately 650 employees at the Geesink Norba Group are represented by separate works councils. The Company believes its relationship with employees is satisfactory.

Seasonal Nature of Business

        In the Company’s access equipment and commercial segments, business tends to be seasonal with an increase in sales occurring in the spring and summer months that constitute the traditional construction season. In addition, sales are generally lower in the first fiscal quarter in all segments due to the relatively high number of holidays which reduce available shipping days.

Industry Segments

        Financial information concerning the Company’s industry segments is included in Note 1920 to the Consolidated Financial Statements contained in Item 8 of this Form 10-K.

Foreign and Domestic Operations and Export Sales

        The Company manufactures products in the United States, Belgium, Canada, The Netherlands, Italy, Sweden, France and Romania for sale throughout the world. Sales from customers outside of the United States were 24.8%, 17.7% and 15.5% of the Company’s consolidated sales for fiscal 2007, 2006 and 2005, respectively.

Financial information concerning the Company’s foreign and domestic operations and export sales is included in Note 1920 to the Consolidated Financial Statements contained in Item 8 of this Form 10-K.

Available Information

        The Company maintains a website with the addresswww.oshkoshtruckcorporation.com. The Company is not including the information contained on the Company’s website as a part of, or incorporating it by reference into, this Annual Report on Form 10-K. The Company makes available free of charge (other than an investor’s own Internet access charges) through its website its Annual Report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and amendments to these reports, as soon as reasonably practicable after the Company electronically files such materials with, or furnishes such materials to, the SEC.

ITEM 1A. RISK FACTORS

        The Company’s financial position, results of operations and cash flows are subject to various risks, many of which are not exclusively within the Company’s control that may cause actual performance to differ materially from historical or projected future performance. Information in this Form 10-K should be considered carefully by investors in light of the risk factors described below and the information set forth under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Certain Assumptions.”

Our markets are highly cyclical and a decline in these markets could have a material adverse effect on our operating performance.

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        A decline in overall customer demand in our cyclical access equipment, commercial and fire and& emergency markets could have a material adverse effect on our operating performance. The access equipment market that JLG operates in is highly cyclical and impacted by the strength of the economy generally, by prevailing mortgage and other interest rates, by residential and non-residential construction spending and by other factors. The ready-mix concrete market that we serve is highly cyclical and impacted by the strength of the economy generally, by prevailing mortgage and other interest rates, by the number of housing starts and by other factors that may have an effect on the level of concrete placement activity, either regionally or nationally. Housing starts were weak in fiscal 2007 causing lower demand for our concrete mixers and telehandlers in the U.S., and we do not expect housing starts to improve until at least late fiscal 2008. We expect U.S. non-residential construction spending to weaken by mid fiscal 2008 for two to three quarters and then recover in fiscal 2009. Should this occur, our sales volumes in the U.S. for access equipment, concrete mixers and certain other products would likely decline. Concrete mixer and access equipment sales also are highly seasonal with the majority of such sales occurring in the spring and summer months, which constitute the traditional construction season. Domestic and European refuse collection vehicle markets are also highly cyclical and impacted by the strength of the economy generally and municipal tax receipts. Fire and& emergency markets are modestly cyclical and are impacted by the economy generally and municipal tax receipts. If these markets face downturns, then there could be a material adverse effect on our net sales, financial condition, profitability and/or cash flows. Furthermore, our commercial businessand fire & emergency businesses saw an increase in orders in fiscal 2006 as customers pre-purchased truck chassis in anticipation of changes in diesel engine emissions standards effective January 1, 2007, which2007. As a result of this, we believe is likely to resultexpect weak demand in a reduction in sales in 2007.our fire & emergency and commercial markets until at least late fiscal 2008.

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        Additionally, the recent surgehigh levels of sales in our defense business isin recent years have been due in significant part to demand for defense trucks, replacement parts and services and truck remanufacturing arising from the conflict in Iraq. Events such as this are unplanned, and we cannot predict how long this conflict will last or the demand for our products that will arise out of such an event. Accordingly, we cannot provide any assurance that the increased defense business as a result of this conflict will continue.

        Finally, JLG operates in a highly cyclical market impacted by the strength of the economy generally, by prevailing mortgage and other interest rates, by non-residential construction spending and by other factors. In addition, JLG’s business is highly seasonal with the majority of its sales occurring in the spring and summer months, which constitute the traditional construction season. If we complete the acquisition of JLG as anticipated in December 2006, then we will be subject to the risk of a downturn in JLG’s cyclical market.

We may not be able to complete or successfully integrate the acquisition of JLG, which may have a material adverse impact on our future growth and operating performance.

        Although we anticipate closing the acquisition of JLG in December 2006, the merger agreement is subject to standard closing conditions and terminations provisions. We may not be able to complete the acquisition of JLG, which could adversely affect our future growth. If we complete the acquisition of JLG, realizationRealization of the benefitssales, operating income and synergies ofsynergy targets for the JLG acquisition will require integration of JLG’s sales and marketing, distribution, manufacturing and engineering and administrative organizations. JLG is a complex, global business. The successful integration of JLG will require substantial attention from our management team. The diversion of management attention, as well as any other difficulties we may encounter in the integration process, could have a material adverse effect on our net sales, financial condition, profitability and/or cash flows. We cannot provide any assurance that we will be able to integrate the operations of JLG successfully, that we will be able to fully realize anticipated synergies from the acquisition or that we will be able to operate the JLG business as profitably as anticipated after the acquisition.anticipated.

Our high leverage and debt service obligations could increase our vulnerability to general adverse economic and industry conditions and limit our ability to obtain future financing.

        As a result of financing the JLG acquisition, we will beare highly leveraged, which will cause us to incur additional interest expense. After the completion of the acquisition of JLG, we expect to haveleveraged. We had approximately $3.3$3.1 billion of debt outstanding and we may increase debt in the future to fund operations.as of September 30, 2007. Our ability to make required payments of principal and interest on our debt will depend on our future performance, which, to a certain extent, is subject to general economic, financial, competitive and other factors that are beyond our control. Based upon our current level of operations, we believe that cash flow from operations, available cash and available borrowings under the newour credit facilities we plan to enter into in connection with the acquisition of JLG will be adequate to meet our future liquidity needs. However, we cannot provide any assurance that our business will generate sufficient cash flow from operations or that future borrowings will be available under our credit facilities in an amount sufficient to enable us to service our indebtedness or to fund our other liquidity needs. In addition, our new credit facilities will contain financial and restrictive covenants that may limit our ability to, among other things, borrow additional funds or take advantage of business opportunities. Our failure to comply with such covenants could result in an event of default that, if not cured or waived, could have a material adverse effect on our financial condition, results of operations and debt service capability.

        Our high level of debt, current conditions in the credit markets and the covenants contained in our credit facilities could have important consequences for our operations, including:

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Our dependency on contracts with U.S. and foreign government agencies subjects us to a variety of risks that could materially reduce our revenues or profits.profits.

        We are dependent on U.S. and foreign government contracts for a substantial portion of our business. That business is subject to the following risks, among others, that could have a material adverse effect on our operating performance:

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If we are unable to successfully turnaround the profitability of our Geesink Norba Group, then we may be required to record a non-cashan impairment charge for Geesink Norba Group goodwill.

        During fiscal 2004 and 2005, the Geesink Norba Group, our European refuse collection vehicle business, operated at a loss due to the weak European economy, declines in selling prices in its markets, operational inefficiencies and increased material, labor and warranty costs related to the launch of a new Geesink-branded rear loader. Although the Geesink Norba Group operated at a profit in fiscal 2006, the Geesink Norba Group operated at a loss again in fiscal 2007 due to soft market demand for its products in the United Kingdom, the lack of available chassis for mounting refuse collection vehicles in France and some market share losses. Although we have taken steps to turn around the business of the Geesink Norba Group, including recently announcing plans to rationalize a facility in The Netherlands and entering into discussions with the Works Council in Sweden regarding rationalizing a facility in that country, reducing its work force, installing new executive leadership, integrating operations with JLG, implementing lean manufacturing practices, introducing new products and outsourcing components to lower cost manufacturing sites, we cannot provide any assurance that the Geesink Norba Group will continuebe able to operate profitably or that such activities will be successful. In fiscal 2007, we anticipate that slowing demand in the United Kingdom and chassis supply issues in France will delay the Geesink Norba Group turnaround. In addition, we may incur costs to continue to implement any such turnaroundturn around beyond our current expectations for such costs.costs as communicated in our earnings release dated November 1, 2007. Further, if we are unable to continue to turnaroundturn around the business of the Geesink Norba Group, then we may be required to record a non-cashan impairment charge for Geesink Norba Group goodwill, and there could be other material adverse effects on our net sales, financial condition, profitability and/or cash flows.

If weWe are unable to successfully introduce or produce the Revolution composite concrete mixer drum, then the revenues and earnings of our commercial segment may be adversely impacted.

        We have made and will continue to make significant investments in technology and manufacturing facilities relating to the Revolution composite concrete mixer drum product, and we anticipate that this product will contribute to growth in revenues and earnings of our commercial segment. However, we cannot provide any assurance that such growth will result. Without limitation:

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We have expanding international operations, the conduct of which subjectsubjects us to risks that may have a material adverse effect on our business.

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        For the fiscal year ended September 30, 2006,2007, approximately 17.7%25% of our net sales were attributable to products sold outside of the United States, and expandingStates. Expanding international sales including through the pending acquisition of JLG, which had $610.7 million of revenues from outside of the United States in its fiscal year ended July 31, 2006, is a part of our growth strategy. International operations and sales are subject to various risks, including political, religious and economic instability, local labor market conditions, the imposition of foreign tariffs and other trade barriers, the impact of foreign government regulations and the effects of income and withholding taxes, governmental expropriation and differences in business practices. We may incur increased costs and experience delays or disruptions in product deliveries and payments in connection with international manufacturing and sales that could cause loss of revenues and earnings. In addition, we are increasingly subject to export control regulations, including, without limitation, the United States Export Administration Regulations and the International Traffic in Arms Regulations. Unfavorable changes in the political, regulatory and business climate could have a material adverse effect on our net sales, financial condition, profitability and/or cash flows.

We are subject to fluctuations in exchange rates and other risks associated with our non-U.S. operations that could adversely affect our results of operations and may significantly affect the comparability of our results between financial periods.

        The results of operations and financial condition of our subsidiaries that conduct operations in foreign countries are reported in the relevant foreign currencies and then translated into U.S. dollars at the applicable exchange rates for inclusion in our consolidated financial statements, which are stated in U.S. dollars. In addition, we have certainsignificant firm sales orders in backlog that are denominated in Euros, U.K. Pounds Sterlingpounds sterling, the Australian dollar and other currencies, certain agreements with subcontractors denominated in U.K. Pounds Sterlingthese currencies and Euros,sales of inventory denominated in U.S. dollars to certain of our subsidiaries that have functional currencies other than the U.S. dollar, all of which will subject us to foreign currency transaction risk to the extent they are not hedged. The completion of our pending acquisition of JLG will increase our exposureWe actively strive to hedge these foreign currency transaction risk as JLG generates a portion of its revenuesrisks but cannot provide assurance that we will be successful in foreign currencies, including Euros, U.K. Pounds Sterling and Australian Dollars.doing so. The exchange rates between many of these currencies and the U.S. dollar have fluctuated significantly in recent years and may fluctuate significantly in the future. Such fluctuations, in particular those with respect to the Euro, the U.K. pound sterling and the U.K. Pound Sterling,Australian dollar, may have a material effect on our net sales, financial condition, profitability and/or cash flows and may significantly affect the comparability of our results between financial periods.

CompetitionWe may experience losses in our industriesaccess equipment segment in excess of our recorded reserves for doubtful accounts, finance and pledged finance receivables, notes receivable and guarantees of indebtedness of others.

        We have a portfolio of finance receivables with customers in our access equipment segment and we are a party to agreements whereby we guarantee the indebtedness of customers in our access equipment segment. We evaluate the collectibility of open accounts, finance and pledged finance receivables, notes receivable and our guarantees of indebtedness of others based on a combination of factors and establish reserves based on our estimates of potential losses. In circumstances where we believe it is intenseprobable that a specific customer will have difficulty meeting its financial obligations, a specific reserve is recorded to reduce the net recognized receivable to the amount we expect to collect, and/or we recognize a liability for a guarantee we expect to pay, taking into account any amounts that we would anticipate realizing if we are forced to take action against the equipment that supports the customer’s financial obligations to us. We also establish additional reserves based upon our perception of the quality of the current receivables, the current financial position of our customers and wepast collections experience. The historical loss experience of our finance receivables portfolio is limited, however, and therefore may not be able to continue to compete successfully.

indicative of future losses. We operatealso face a concentration of credit risk with JLG’s top ten customers representing approximately 45% of JLG’s sales. Furthermore, some of these customers are highly leveraged. We may incur losses in highly competitive industries. Severalexcess of our competitors have greaterrecorded reserves if the financial marketing, manufacturing and distribution resources than us and we are facing competitive pricing from new entrants in certain markets. Our products may not continue to compete successfully with the productscondition of competitors, and we may not be able to retain or increase our customer base or to improve or maintain our profit margins on sales to our customers allwere to deteriorate or the full amount of which could adversely affectany anticipated proceeds from the sale of the collateral supporting our net sales,customers’ financial condition, profitability and/or cash flows.obligations is not realized.

A disruption or termination of the supply of parts, materials, components and final assemblies from third-party suppliers could delay sales of our vehicles and vehicle bodies.

        We have experienced, and may in the future experience, significant disruption or termination of the supply of some of our parts, materials, components and final assemblies that we obtain from sole source suppliers or subcontractors or incur a significant increase in the cost of these parts, materials, components or final assemblies. Such disruptions, terminations or cost increases could delay sales of our vehicles and vehicle bodies and could result in a material adverse effect on our net sales, financial condition, profitability and/or cash flows. A recent surge

Changes in over-the-road vehicle sales has created shortages of certain components we utilize. The shortages have also caused periodic delays or limitations onregulations could adversely affect our business.

        Both our products and the receipt of chassis scheduled for mountingoperation of our manufacturing facilities are subject to statutory and regulatory requirements. These include environmental requirements applicable to manufacturing and vehicle bodies across bothemissions, government contracting regulations and domestic and international trade regulations. A significant change to these regulatory requirements could substantially increase manufacturing costs or impact the size or timing of demand for our fire and emergency and commercial segments. It is likely that some orproducts, all of such shortageswhich could diminish during fiscal 2007 duemake our business results more variable.

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Competition in our industries is intense and we may not be able to continue to compete successfully.

        We operate in highly competitive industries. Several of our competitors have greater financial, marketing, manufacturing and distribution resources than us and we are facing competitive pricing from new diesel engine emissions standards taking effectentrants in certain markets. Our products may not continue to compete successfully with the products of competitors, and we may not be able to retain or increase our customer base or to improve or maintain our profit margins on January 1, 2007, but such conditionssales to our customers, all of which could re-occur later in fiscal 2007 adversely affect our net sales, financial condition, profitability and/or fiscal 2008 as customers resume their normal procurement patterns.cash flows.

ITEM 1B. UNRESOLVED STAFF COMMENTS

        None.

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ITEM 2. PROPERTIES

        ManagementThe Company believes the Company’sits equipment and buildings are modern, well maintained and adequate for its present and anticipated needs. As of November 16, 2006,21, 2007, the Company operated in 4254 manufacturing facilities. The location, size and focus of the Company’s facilities are provided in the table below:

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        The Company’s manufacturing facilities generally operate five days per week on one or two shifts, except for seasonal shutdowns for one to three week periods. ManagementThe Company believes the Company’sits manufacturing capacity could be significantly increased with limited capital spending by working an additional shift at each facility.

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        In addition, the Company performs contract maintenance services out of multiple warehousing and service facilities owned and/or operated by the U.S. government and third parties, including locations in the United States, Japan, Kuwait, Iraq, and multiple other countries in Europe and the Middle East. The Company also owns a 223,000 square-foot facility in Killeen, Texas which is used for service and support.

        In addition to sales and service activities at the Company’s manufacturing facilities, the Company maintains 18 sales and service centers in the United States. The Company owns such facilities in Commerce City, Colorado; Villa Rica, Georgia; Hutchins, Texas; Morgantown, Pennsylvania; and Gahanna, Ohio. The Company leases such facilities in Stockton, California; East Puyallup, Washington; Salt Lake City, Utah; Sugar Grove, Illinois; Fairfield, Ohio; East Granby, Connecticut; Houston, Texas; Fort Wayne, Indiana; Lakeland, Florida; Grand Rapids, Michigan; Milwaukee, Wisconsin; Phoenix, Arizona; and Buffalo, New York. These facilities range in size from approximately 3,000 square feet to approximately 37,000 square feet and are used primarily for sales and service of concrete mixers and refuse bodies.collection vehicles. The Company leases approximately 20,000 square feet in Las Vegas, Nevada for mounting carriers and wreckers.

        In addition to sales and service activities at the Geesink Norba Group’s manufacturing facilities, the Geesink Norba Group maintains 2119 sales and service centers in Europe. The Geesink Norba Group owns such

        In addition, JLG leases executive offices in Hagerstown, Maryland and an idle 270,000 square-foot manufacturing location in Port Washington, Wisconsin, which is an office location for telehandler engineering and other support functions. In addition, JLG leases a number of small distribution, administration or service facilities in St. Albans, UK and Karlslunde, Denmark; and leases facilities in London, Lancaster, Reading, and Oldham, UK; Paris and Mions, France; Hunxe, Germany; Pabianice, Poland; Milan, Italy; Vallentuna, Sweden; Amsterdam, Duiven, and Emmeloord, The Netherlands; and Madrid, Seville, and Barcelona, Spain. These facilities range in size from approximately 1,600 square feet to 25,000 square feet.throughout the world.

ITEM 3. LEGAL PROCEEDINGS

        As part of its routine business operations, the Company disposes of and recycles or reclaims certain industrial waste materials, chemicals and solvents at third party disposal and recycling facilities, which are licensed by appropriate governmental agencies. In some instances, these facilities have been and may be designated by the United States Environmental Protection Agency (“EPA”) or a state environmental agency for remediation. Under the Comprehensive Environmental Response, Compensation, and Liability Act and similar state laws, each potentially responsible party (“PRP”) that contributed hazardous substances may be jointly and severally liable for the costs associated with cleaning up thethese sites. Typically, PRPs negotiate a resolution with the EPA and/or the state environmental agencies. PRPs also negotiate with each other regarding allocation of the cleanup cost. The Company has been named a PRP with regard to three multiple-party sites. Based on current estimates, the Company believes its liability at these sites will not be material and any responsibility of the Company is adequately covered through established reserves.

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        The Company is addressing a regional trichloroethylene (“TCE”) groundwater plume on the south side of Oshkosh, Wisconsin. The Company believes there may be multiple sources of TCE in the area. TCE was detected at the Company’s North Plant facility with testing showing the highest concentrations in a monitoring well located nearon the upgradient property line. Because the investigation process is still ongoing, it is not possible for the Company to estimate its long-term total liability associated with this issue at this time. Also, as part of the regional TCE groundwater investigation, the Company conducted a groundwater investigation of a former landfill located on Company property. The landfill, acquired by the Company in 1972, is approximately 2.0 acres in size and is believed to have been used for the disposal of household waste. Based on the investigation, the Company does not believe the landfill is one of the sources of the TCE contamination. Based upon current knowledge, the Company believes its liability associated with the TCE issue will not be material and is adequately covered through reserves established by the Company. However, this may change as investigations proceed by the Company, other unrelated property owners, and the government.

        The Company has identified potential soil and groundwater contamination impacts from solvents and/or metals at three of its manufacturing sites related to the Geesink Norba Group. During the fourth quarter of fiscal 2006, studies of these sites were completed. The results from two of the sites indicated that no further action was necessary. Based on the study of the third site, the Company reached an agreement with the environmental authorities that no further action was necessary for a portion of the site. The Company is conducting an evaluation of the remaining portion of the site to identify if any action is required. Based on current estimates, the Company believes its liability at these sites will not be material and any responsibility of the Company is adequately covered through reserves established by the Company.

        The Company had reserves of $5.2$4.1 million for environmental matters at September 30, 20062007 for losses that are probable and estimable. The amount recorded for identified contingent liabilities is based on estimates. Amounts recorded are reviewed periodically and adjusted to reflect additional technical and legal information that becomes available. Actual costs to be incurred in future periods may vary from the estimates, given the inherent uncertainties in evaluating certain exposures. Subject to the imprecision in estimating future contingent liability costs, the Company does not expect that any sum it may have to pay in connection with these matters in excess of the amounts recorded will have a materially adverse effect on its financial position, results of operations or liquidity.

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        The Company is subject to other environmental matters and legal proceedings and claims, including patent, antitrust, product liability, warranty and state dealership regulation compliance proceedings that arise in the ordinary course of business. In May 2006, Armor Holdings, Inc. (“Armor Holdings”) announced that it was considering filing a lawsuit against the Company alleging, among other things, that the Company tortiously interfered with a merger agreement between Armor Holdings and Stewart & Stevenson Services, Inc. The Company believes that any such potential claim is without merit and intends to vigorously defend any such action should it be filed. Although the final results of all such matters and claims cannot be predicted with certainty, managementthe Company believes that the ultimate resolution of all such matters and claims will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

        At September 30, 2007, the Company had warranty reserves of $88.2 million and product and general liability reserves of $51.6 million. See Notes 12 and 19 of the Notes to Consolidated Financial Statements. Although the final results of all such matters and claims cannot be predicted with certainty, the Company believes that the ultimate resolution of all such matters and claims, after taking into account the liabilities accrued with respect to all such matters and claims of $139.8 million at September 30, 2007, will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows. Actual results could vary, among other things, due to the uncertainties involved in litigation.

        At September 30, 2006, the Company had available warranty reserves of $56.9 million and product and general liability reserves of $14.2 million. See Notes 9 and 18 of the Notes to Consolidated Financial Statements. Although the final results of all such matters and claims cannot be predicted with certainty, management believes that the ultimate resolution of all such matters and claims, after taking into account the liabilities accrued with respect to all such matters and claims of $71.1 million at September 30, 2006, will not have a material adverse effect on the Company’s consolidated financial statements. Actual results could vary, among other things, due to the uncertainties involved in litigation.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        No matters were submitted to a vote of security holders during the three months ended September 30, 2006.2007.

EXECUTIVE OFFICERS OF THE REGISTRANT

        The following table sets forth certain information as of November 16, 200621, 2007 concerning the Company’s executive officers. All of the Company’s officers serve terms of one year and until their successors are elected and qualified.

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        Robert G. BohnBohn.. Mr. Bohn joined the Company in 1992 as Vice President-Operations. He was appointed President and Chief Operating Officer in 1994. He was appointed President and Chief Executive Officer in October 1997 and Chairman of the Board in January 2000. Mr. Bohn was elected a Director of the Company in June 1995. He is a director of Graco, Inc. and Menasha Corporation.

        Charles L. Szews. Mr. Szews joined the Company in 1996 as Vice President and Chief Financial Officer. He served as Executive Vice President and Chief Financial Officer from 1997 until October 2007, at which time he was appointed to President and Chief Operating Officer. Mr. Szews was elected a Director of the Company in May 2007. He is a director of Gardner Denver, Inc.

Bryan J. BlankfieldBlankfield.. Mr. Blankfield joined the Company in June 2002 as Vice President, General Counsel and Secretary and was appointed to his current position in February 2003. He previously served as in-house legal counsel and consultant for Waste Management, Inc., a waste services company, and its predecessors from 1990 to 2002. He was appointed Associate General Counsel and Assistant Secretary of Waste Management, Inc. in 1995 and Vice President in 1998.

        Thomas D. Fenner. Mr. Fenner joined the Company in January 1982 as a scheduler and has served in various assignments, including Plant Manager, Vice President – Manufacturing of McNeilus, Vice President – Manufacturing Operations, and Vice President and General Manager of Operations of Pierce Manufacturing Inc.and Vice President, Chief Procurement Officer and General Manager, Airport Business. Mr. Fenner was appointed to his present position in May 2004.July 2007.

        Joseph H. Kimmitt. Mr. Kimmitt joined the Company in June 2001 as Vice President, Government Operations and was appointed to his current position in September 2006. He previously served as a Professional Staff Member of the U.S. House and Senate Appropriations Committees from 1984 to 2001. He was appointed Deputy Staff Director of the Senate Appropriations Committee in 1997.

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        Mark A. MeadersCraig E. Paylor.. Mr. MeadersPaylor joined Pierce Manufacturing Inc.the Company in September 1996 as Purchasing ManagerDecember 2006 with the acquisition of JLG and has served in various assignments, including Vice President Operations and Corporate Purchasing, Materials and Logistics, Executive Vice President and General Manager of European Operations and Executive Vice President, Marketing, Sales and Dealer Distribution, Pierce Manufacturing Inc. Mr. Meaders was appointed to his current position in July 2004.October 2007. Mr. Paylor joined JLG in 1983 as a sales representative. In 1996, Mr. Paylor became an officer of JLG and was appointed Senior Vice President of Sales and Market Development in 1999. In 2002, he was appointed JLG’s Senior Vice President, Sales, Marketing and Customer Support. In 2006, he was appointed JLG’s Senior Vice President, Marketing. In May 2007, he was appointed as a Senior Vice President of the Company and President of JLG.

        John W. Randjelovic. Mr. Randjelovic joined the Company in October 1992 as Vice President and General Manager in charge of the Bradenton, Florida Division. In September 1996, he was appointed Vice President of Manufacturing, Purchasing and Materials for Pierce. In October 1997, Mr. Randjelovic was appointed Vice President and General Manager, Pierce Manufacturing Inc. In 1999, Mr. Randjelovic was appointed Executive Vice President and President, Pierce and was appointed to his current position in February 1999.July 2007.

David M. Sagehorn. Mr. Sagehorn joined the Company in 2000 as Senior Manager – Mergers & Acquisitions and has served in various assignments, including Director-Business Development, Vice President-Defense Finance, Vice President-McNeilus Finance and Vice President-Business Development. In 2005, he was appointed Vice President and Treasurer and he was appointed to his present position in October 2007.

        William J. StoddartStoddart.. Mr. Stoddart joined the Company’s Defense unitbusiness in September 1995 as General Manager Medium Vehicles. In January 1999, he was appointed Vice President, Defense Programs and he was appointed to his present position in October 2001.

Charles L. Szews. Mr. Szews joined the Company in March 1996 as Vice President and Chief Financial Officer and he was appointed to his present position in October 1997.

        Donald H. VerhoffVerhoff.. Mr. Verhoff joined the Company in May 1973 and has served in various assignments, including Director Test and Development/New Product Development, Director Corporate Engineering and Vice President of Technology. Mr. Verhoff was appointed to his present position in September 1998.

        Michael J. Wuest. Mr. Wuest joined the Company in November 1981 as an analyst and has served in various assignments, including Senior Buyer, Director of Purchasing, Vice President — Manufacturing Operations, Vice President and General Manager of Operations of Pierce Manufacturing Inc. and Executive Vice President, Chief Procurement Officer and General Manager, Airport Business. Mr. Wuest was appointed to his present position in May 2004.

        Matthew J. ZolnowskiZolnowski.. Mr. Zolnowski joined the Company as Vice President-Human Resources in January 1992, was appointed Vice President, Administration in February 1994 and was appointed to his present position in February 1999.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

        The information relating to dividends included in Notes 1314 and 21 of the Notes to Consolidated Financial Statements contained herein under Item 8 and the information relating to dividends per share contained herein under Item 6 are hereby incorporated by reference in answer to this item.

        In July 1995, the Company’s Board of Directors authorized the repurchase of up to 6,000,000 shares of Common Stock. The Company did not repurchase any shares under this authorization during fiscal 2006.2007. As of September 30, 2006,2007, the Company had repurchased 2,769,210 shares under this program at a cost of $6.6 million, leaving the Company with authority to repurchase 3,230,790 shares of Common Stock under this program. The authorization does not expire.

Dividends and Common Stock Price

        During fiscal 2005, the Board of Directors of the Company increased the quarterly dividend rate twice, resulting in an increase in the quarterly dividend from $0.04375 per share of Common Stock to $0.06750 per share. On January 17, 2006, the Board of Directors of the Company increased the quarterly dividend rate from $0.06750 per share of Common Stock to $0.10 per share. No changes to the quarterly dividend rate were made during fiscal 2007.

        It is the Company’s intention to declare and pay dividends on a regular basis. However, the payment of future dividends is at the discretion of the Company’s Board of Directors and will depend upon, among other things, future earnings, capital requirements, the Company’s general financial condition, general business conditions and other factors. The agreements governing the Company’s revolving credit facility do not restrict the Company’s ability to pay dividends on its common stock except that they provide that the Company must maintainAs a minimum net worth of $550.0 million plus the net proceeds of all equity issuances and 50%result of the Company’s positive net income. Further, these bank agreements provide thatdebt incurred for the Company’s leverage ratio (as defined) shall not exceed 3.5 to 1.0 and that the Company shall not permit its domestic earnings before interest, taxes, depreciation and amortization (as defined) to be less than $150.0 million.

        Assuming completion of the pending JLG acquisition, the Company expects to only to make modest changes to its dividend practices, if any, until in its judgment it adequately reduces debt following the acquisition. In conjunction withThe Company’s credit agreement limits the planned acquisitionamount of JLG,its dividends and other types of distributions to $40 million during any fiscal year plus the positive result of (x) 25% of the cumulative net income of the Company intendsand its consolidated subsidiaries for all fiscal quarters ending after December 6, 2006, minus (y) the cumulative amount of all dividends and other types of distributions made in any fiscal year ending after December 6, 2006 that exceed $40 million.

        The Company’s credit agreement contains various restrictions and covenants which would prevent the payment of dividends in the event of non-compliance, including (1) requirements that the Company maintain certain financial ratios at prescribed levels; and (2) restrictions on the ability of the Company and certain of its subsidiaries to enter intoconsolidate or merge, create liens, incur additional indebtedness and dispose of assets. The credit agreement also requires maintenance on a new senior secured credit facilityrolling four quarter basis of a maximum leverage ratio (as defined) of 5.25x for the fiscal quarter ending on September 30, 2007, reducing to fund4.75x for the JLG acquisition that will further restrictfiscal quarters ending on December 31, 2007 through September 30, 2008, 4.25x for the Company’s ability to pay dividendsfiscal quarters ending on December 31, 2008 through tighter financial covenants. See “Management’s DiscussionSeptember 30, 2009 and Analysis3.75x for fiscal quarters ending thereafter, and a minimum interest coverage ratio (as defined) of Financial Condition and Results2.50x, in each case tested as of Operations – Liquidity and Capital Resources” for a descriptionthe last day of each fiscal quarter. The Company was in compliance in all material respects with these covenants.covenants at September 30, 2007.

        The Common Stock is listed on the New York Stock Exchange (“NYSE”) under the symbol OSK. As of November 13, 2006,19, 2007, there were 9521,103 holders of record of the Common Stock. The following table sets forth prices reflecting actual sales of the Common Stock as reported on the NYSE.

        Item 12 of this Annual Report on Form 10-K contains certain information relating to the Company’s equity compensation plans.

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        The following information in this Item 5 is not deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission (“SEC”) or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 (“Exchange Act”) or to the liabilities of Section 18 of the Exchange Act, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent the Company specifically incorporates it by reference into such a filing: the SEC requires the Company to include a line graph presentation comparing cumulative five year Common Stock returns with a broad-based stock index and either a nationally recognized industry index or an index of peer companies selected by the Company.  The Company has chosen to use the Standard & Poor’s MidCap 400 market index as the broad-based index and the companies currently in the Standard Industry Classification Code 371 Index (motor vehicles and equipment) (the “SIC Code 371 Index”) as a more specific comparison.

        The comparisons assume that $100 was invested on September 30, 2002 in each of: our Common Stock, the SIC Code 371 Index and the Standard & Poor’s MidCap 400 market index. The total return assumes reinvestment of dividends and is adjusted for stock splits. The fiscal 2007 return listed in the charts below is based on closing prices per share on September 28, 2007. On that date, the closing price for the Company’s Common Stock was $61.97.

Fiscal year ended September 30,

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ITEM 6. SELECTED FINANCIAL DATA

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

        The Company is a leading designer, manufacturer and marketer of a wide range of specialty vehicles and vehicle bodies, including access equipment, defense trucks, fire and& emergency vehicles defense trucks and concrete mixers and refuse bodies.collection vehicles. The Company is a leading global manufacturer of aerial work platforms under the “JLG” brand name. The Company is among the worldwide leaders in the manufacturing of telehandlers under the “JLG,” “SkyTrak,” “Lull” and “Gradall’ brand names. The Company manufactures defense trucks under the “Oshkosh” brand name and is the leading manufacturer of severe-duty heavy-payload tactical trucks for the DoD. Under the “Pierce” brand name, the Company is among the leading domestic manufacturers of fire apparatus assembled on both custom and commercial chassis. Under the “Jerr-Dan” brand name, the Company is a leading domestic manufacturer and marketer of towing and recovery equipment. Under the “BAI” brand name, the Company is a manufacturer and marketer of fire apparatus, aircraft rescue and firefighting vehicles and equipment to municipalities and airports in Italy and exports into Europe, the Middle East and North Africa. The Company manufactures aircraft rescue and firefighting and airport snow removal vehicles under the “Oshkosh” brand name and ambulances under the “Medtec” brand name. The Company manufactures mobile medical trailers under the “AK“Oshkosh Specialty Vehicles” and “SMIT” brand names. Under the “Frontline” brand name, the Company is a leading domestic manufacturer and marketer of broadcast vehicles. The Company also manufactures defense trucks under the “Oshkosh” brand name and is the leading manufacturer of severe-duty heavy-payload tactical trucks for the DoD. Under the “McNeilus,” “Oshkosh,” “London” and “CON-E-CO” brand names, the Company manufactures rear- and front-discharge concrete mixers and portable and stationary concrete batch plants. Under the “McNeilus,” “Geesink,” “Norba” and “Kiggen” brand names, the Company manufactures a wide range of automated, rear, front, side and top loading refuse vehicle bodiescollection vehicles and mobile and stationary refuse compactors and transfer systems. Under the “IMT” brand name, the Company is a leading domestic manufacturer of field service vehicles and truck-mounted cranes.

        Major products manufactured and marketed by each of the Company’s business segments are as follows:

Access equipment – aerial work platforms and telehandlers used in a wide variety of construction, industrial, institutional and general maintenance applications to position workers and materials at elevated heights. Access equipment customers include equipment rental companies, construction contractors, manufacturing companies, home improvement centers and the U.S. military.

Defense– heavy- and medium-payload tactical trucks and supply parts and services sold to the U.S. military and to other militaries around the world.

Fire & emergency – custom and emergency – commercial and custom firefirefighting vehicles and equipment, aircraft rescue and firefighting vehicles, snow removal vehicles, ambulances, wreckers, carriers and other emergency vehicles primarily sold to fire departments, airports, other governmental units and towing companies in the U.S. and abroad, mobile medical trailers sold to hospitals and third party medical service providers in the U.S. and Europe and broadcast vehicles sold to broadcasters and TV stations in North America and abroad.

        Defense – heavy- and medium-payload tactical trucks and supply parts and services sold to the U.S. military and to other militaries around the world.

Commercial – concrete mixer systems,mixers, refuse vehicle bodies,collection vehicles, mobile and stationary compactors and waste transfer units, portable and stationary concrete batch plants and vehicle components sold to ready-mix companies and commercial and municipal waste haulers in North America, Europe and other international markets and field service vehicles and truck-mounted cranes sold to mining, construction and constructionother companies in the U.S. and abroad.

        All estimates referred to in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” refer to the Company’s estimates as of October 31, 2006November 1, 2007 when the Company conducted a conference call in connection with its announcement of its earnings for the fourth quarter and fiscal year ended September 30, 20062007 and its revised outlook for fiscal 2007.2008.

Acquisition HistoryRecent Acquisitions

        Since 1996, the Company has selectively pursued strategic acquisitions to enhance its product offerings and diversify its business. The Company has focused its acquisition strategy on providing a full range of products to customers in specialty vehicle and vehicle body markets that are growing and where it can develop strong market positions and achieve acquisition synergies. Identified belowAcquisitions completed during the past three fiscal years include:

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        On December 6, 2006, the Company acquired JLG for $3.1 billion, including transaction costs and the assumption of debt and net of cash acquired. JLG is information with respect to these acquisitions, alla leading global manufacturer of which have been accounted for using the purchase methodaccess equipment based on gross revenues. The results of accounting and have beenJLG’s operations are included in the Company’sconsolidated results of operationsthe Company from the date of acquisition.

        On September 18, 1996,During fiscal 2006, the Company completed two acquisitions: IMT and OSV. In August 2006, the Company acquired IMT for cash all of the issued and outstanding capital stock of Pierce for $156.9 million, including acquisition costs and net of cash acquired. The acquisition was financed from borrowings under a previous bank credit facility. Pierce$133.0 million. IMT is a leading North American manufacturer and marketer of firefield service vehicles and other emergency apparatus.

        On December 19, 1997, Pierce acquired certain inventory, machinery and equipment, and intangible assets of Nova Quintech, a division of Nova Bus Corporation,truck-mounted cranes for $3.6 million. Nova Quintech was engaged in the manufacture and sale of aerial devices for fire trucks.

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        On February 26, 1998, the Company acquired for cash all of the issued and outstanding capital stock of McNeilus and entered into related non-compete and ancillary agreements for $217.6 million, including acquisition costs and net of cash acquired. McNeilus is a leading manufacturer and marketer of rear-discharge concrete mixers and portable concrete batch plants for the concrete placement industry and refuse vehicle bodies for the waste services industry in the U.S. The acquisition was financed from borrowings under a previous senior credit facility and the issuance of senior subordinated notes. The senior subordinated notes were retired in fiscal 2003.

        On November 1, 1999, the Company acquired the manufacturing assets of Kewaunee for $5.5 million in cash plus the assumption of certain liabilities aggregating $2.2 million. Kewaunee manufactures all of the Company’s requirements for aerial devices in its fire and emergency segment.

        On April 28, 2000, the Company acquired all of the issued and outstanding capital stock of Viking, a distributor of front-discharge concrete mixers, for $1.7 million, including acquisition costs and net of cash acquired.

        On October 30, 2000, the Company acquired all of the issued and outstanding capital stock of Medtec and an affiliate and certain related assets for $14.5 million in cash, including acquisition costs and net of cash acquired. Medtec is a U.S. manufacturer of custom ambulances. The acquisition was financed from available cash and borrowings under a previous senior credit facility.

        On March 6, 2001, the Company acquired certain machinery and equipment, parts inventory and certain intangible assets from TEMCO, a division of Dallas-based Trinity Industries, Inc. TEMCO, a manufacturer of concrete mixers, batch plants and concrete mixer parts, had discontinued its business. Consideration for the purchase was valued at $15.7 million and included cash of $8.1 million and credits to the seller valued at $7.6 million for future purchase of certain concrete placement products from the Company over the next six years. The acquisition was financed from borrowings under a previous senior credit facility.

        Onniche markets. In July 25, 2001, the Company acquired all of the outstanding capital stock of the Geesink Norba Group for $137.6 million, including acquisition costs, and net of cash acquired. The Geesink Norba Group is a leading European manufacturer of refuse collection vehicle bodies, mobile and stationary compactors and transfer stations. The acquisition was financed from the proceeds of a term loan under a previous senior credit facility.

        On July 8, 2004, the Company acquired all of the issued and outstanding capital stock of JerrDan for $79.9 million, including acquisition costs and net of cash acquired. JerrDan is a leading manufacturer and marketer of towing and recovery equipment in the U.S. The acquisition was financed from borrowings under a previous senior credit facility.

        On July 29, 2004, the Company acquired 75% of the outstanding quotas (ownership interests) of BAI for €6.3 million ($7.6 million) in cash, including acquisition costs and net of cash acquired, plus debt assumed of €10.9 million ($13.2 million). BAI is a manufacturer and marketer of fire apparatus, aircraft rescue and firefighting vehicles and equipment to municipalities and airports in Italy and exports into Europe, the Middle East and North Africa. The acquisition was financed from borrowings under a previous senior credit facility.

        On November 1, 2004, the Company acquired all of the issued and outstanding capital stock of CON-E-CO for $19.9 million in cash, including post-closing working capital adjustments. CON-E-CO is a leading manufacturer and marketer of portable and stationary concrete batch plants in the U.S. The acquisition was financed from borrowings under the Company’s revolving credit facility.

        On March 9, 2005, the Company acquired all of the outstanding capital stock of London for $11.2 million, including acquisition costs and net of cash acquired. London is a manufacturer and marketer of rear-discharge concrete mixers for the concrete placement market with sales throughout the Americas. The acquisition was financed from available cash and borrowings under the Company’s revolving credit facility.

        On July 31, 2006, the Company completed the acquisition of all of the equity interests of AKOSV for $142.0 million, including acquisition costs and net of cash acquired. AKmillion. OSV is a leading manufacturer of mobile medical, homeland security command and communications, and broadcast vehicles with sales throughout the Americas and Europe. The acquisition was financed from available cash.

        On August 14, 2006,During fiscal 2005, the Company completed two acquisitions: London and CON-E-CO. In March 2005, the Company acquired allLondon for $11.2 million. London is a manufacturer and marketer of rear-discharge concrete mixers for the outstanding capital stock of IMTconcrete placement market with sales throughout the Americas. In November 2004, the Company acquired CON-E-CO for $130.8 million, including acquisition costs and net of cash acquired. IMT$19.9 million. CON-E-CO is a leading North American manufacturer and marketer of field service vehiclesportable and truck-mounted articulating cranesstationary concrete batch plants for niche markets. The acquisition was financed from available cash and borrowings under the Company’s revolving credit facility.Americas.

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Executive Overview

        Fiscal 2007 was a record year for the Company in terms of sales, net income and earnings per share. Net sales were $6.3 billion, an 84.0% increase over fiscal 2006, net income was $268.1 million, a 30.5% increase over the prior year and earnings per share was $3.58, a 29.7% increase over fiscal 2006. These increases were primarily driven by exceptional performance in the newly acquired access equipment segment. The Company’s focus in fiscal 2008 is to complete the integration of JLG, achieve the synergy opportunities identified as part of that acquisition, successfully execute the turnaround actions at the Geesink Norba Group and reduce the Company’s debt to provide flexibility to make strategic acquisitions in late fiscal 2008 or fiscal 2009. The Company’s financial performance in fiscal 20062007 compared to fiscal 20052006 and its expectations for its financial performance in fiscal year 20072008 follow:

⁽¹⁾Company estimates as of October 31, 2006. Estimates are exclusive of the estimated impact of acquiring JLG.

        The Company experienced salesCompany’s results in fiscal 2007 were driven by the strong performance of JLG post-acquisition, improved fire & emergency segment results and operating income growthimprovements in all three of the Company’s segments for fiscal 2006 as business conditions were favorable in all segments.effective tax rate. These resultseffects were partially offset by substantiallylower earnings in the commercial segment and higher corporate expenses related to higher acquisition investigationpersonnel costs, higher professional services fees and related costs asincreased travel expenses and an increase in interest expense.

        Since 1996, the Company has selectively pursued strategic acquisitions to enhance its product offerings and diversify its business. The Company has focused its acquisition strategy on providing a transformationalfull range of products to customers in specialty vehicle and vehicle body markets that are growing and where it can develop strong market positions and achieve significant synergies to help drive superior returns for shareholders. On December 6, 2006, the Company completed its fifteenth acquisition strategy; higher personnelsince 1996 and formed its access equipment segment with the purchase of JLG for $3.1 billion, including transaction costs including costs relatedand the assumption of debt and net of cash acquired. The results of JLG’s operations are included in the consolidated results of the Company from the date of acquisition. In fiscal 2007, JLG contributed sales of $2.5 billion and operating income of $268.4 million to the adoptionconsolidated results. After consideration of SFAS No. 123(R) andinterest costs on acquisition-related debt, JLG was accretive to start up an office in China.

        The Company’s fire and emergency segment experienced sales growth of 14.3%earnings per share by approximately $0.75 in fiscal 2006 and an operating income increase of 13.0%. The Company believes that markets served in this segment exhibited slow, steady growth in fiscal 2006 and that market share gains largely contributed to the double digit percentage growth in sales in fiscal 2006.2007.

        Since the onset of Operation Iraqi Freedom in 2003, including fiscal 2006, the Company’s defense segment has benefited substantially from increasing U.S. Department of Defense (“DoD”)DoD requirements for new trucks, parts, service, armoring and remanufacturing of the Company’s defense vehicles operated in Iraq. During fiscal 2006,2007, the Company’s defense segment continued to outperform the prior year as a resultincreased production of increasing requirements for heavy-payloadnew and remanufactured trucks largely arising from conflictsto meet the requirements of its largest customer, the DoD, in Iraqits mission to successfully complete Operation Iraqi Freedom. As a result, sales of new and Afghanistan. These factors caused the Company’s defense sales and operating income to increase 24.1% and 15.2%, respectively, duringremanufactured trucks increased 25.7% in fiscal 20062007 as compared to the prior year. Operating incomeDue to lower armor sales, inefficiencies on the start-up of a contract and lower negotiated margins on the FHTV program, operating margin declined from 18.4% of sales in the prior year to 17.3% of sales in fiscal 2005 benefited from adjustments totaling $28.4 million related2007. As a result, operating income for the defense segment only increased 1.1% for fiscal 2007 compared to the prior year.

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        The Company’s fire & emergency segment experienced solid sales growth of 18.8% in fiscal 2007 and an increase in the margin on the Medium Tactical Vehicle Replacement (“MTVR”) base contractoperating income of 19.4%. The acquisition of OSV added sales of $101.7 million and the recoveryoperating income of pre-contract costs previously expensed on an armoring contract. These contracts were concluded$8.1 million to fiscal 2007 results. Higher organic sales levels in fiscal 2005.2007 reflected strong order flow and market share gains for domestic fire apparatus and homeland security products as well as stronger towing product sales. The Company believes that the fire apparatus and towing markets benefited during fiscal 2007 from the pre-buy of units before new diesel engine emissions standards that took effect on January 1, 2007. The increase in operating income in fiscal 2007 for the businesses in the segment other than OSV reflected strong sales and improved margins at the Company’s domestic fire apparatus business as a result of ongoing cost reduction initiatives and lower losses at the Company’s domestic ambulance business.

        Sales in the Company’s commercial segment increased 9.6%4.9% in fiscal 2006 and operating income increased 177.7%.2007. Excluding the impact of the IMT acquisition, sales were down 2.4% in fiscal 2007 as compared to the prior year. The increasedecrease in sales was largely attributable to strongweak demand at the Company’s North American businesses during the last half of fiscal 2007 as a result of a sharp decrease in advance ofdemand subsequent to the January 1, 2007 diesel engine emissions standards changes effective January 1, 2007 for diesel engines in the classes of chassis the Company sells and/or utilizes for mounting of the Company’s vehicle bodiesU.S. and higher unit saleslower residential construction. Sales at the Company’s European refuse collection vehicle business offsetwere down 9.2% in part by a lower mixfiscal 2007 as compared to the prior year due to soft demand for the Company’s products in the United Kingdom, the lack of package sales involving both aavailable chassis in France for the first six months of the fiscal year and some market share losses.

        Operating income in the Company’s commercial vehicle chassis and vehicle body.segment decreased 12.9% in fiscal 2007. Excluding the impact of the IMT acquisition, operating income was down 30.6% in fiscal 2007 as compared to the prior year. The increasedecrease in operating income was primarily driven by higher unit volume, improved pricing and improved product mix inlargely due to the Company’s North American operations and the return to profitabilityperformance of the Company’s European refuse business in fiscal 2006 as compared tocollection vehicle business. The Company’s European refuse collection vehicle operations had an operating loss of $8.6$19.3 million in the comparable period in the prior year. The prior year’s operating loss included a $3.7 million charge for workforce reductions at the Company’s European refuse facilities. The remaining improvement infiscal 2007 compared with operating income for the European refuse operation was primarily the result of increased sales volume, cost reduction activities and the restructuring of that business$2.9 million in fiscal 2005 to reduce costs. Domestic orders within the segment were particularly strong in fiscal 2006 due to a pre-buy in advance of the emissions standards change. At September 30, 2006, the Company’s backlog in its commercial segment was up 92.2% as compared to September 30, 2005.

2006. In fiscal 2007, the Company incurred charges totaling $9.7 million in connection with a reduction in its European refuse collection vehicle business salaried and hourly workforce, the closure of an underutilized facility and other adjustments related to the plan to turn around this business. The Company expects to incur additional charges at this business in fiscal 2008 related to further planned turn around activities.

        The Company has a positive outlook for fiscal 2008 in spite of a slowing U.S. economy as the Company seeks to achieve the full synergy potential from the JLG acquisition. The Company estimates that its sales on a stand-alone basis excluding the impact of the pending JLG acquisition, will increase to $3.65$7.1 — $3.75$7.3 billion and that its earningearnings per share will increase to $3.05$4.15 — $3.15 per share.$4.35. The Company believes thatexpects sales in its access equipment segment to grow by a double digit percentage in fiscal 2008, in part as a result of the ownership of JLG for a full year in fiscal 2008, but also due to a strong backlog in this segment and strong markets outside North America, offset by expected weakness in U.S. access equipment sales. The Company also expects its defense segment sales and operating income will increaseto rise at a double digit percentage in fiscal 2007 over fiscal 2006, despite the scheduled completion of the production phase of the U.K. wheeled tanker contract in the first quarter of fiscal 2007, given the duration and intensity of Operation Iraqi Freedom and the U.S. Army’s modularity initiative, which, among other things, are expected2008 due to increase the DoD’s requirementsstrong DoD funding for the Company’s tactical trucks and for the remanufacturing of such trucks damaged in the conflict.its truck programs. The Company likewise expects its operating income to increase in its fire and emergency and commercial segments in fiscal 2007 due to the benefits of the fiscal 2006 acquisitions of AK and IMT and its price increasesuch sales increases and cost reduction initiatives, which the Company expects will more than offset the impact of any demand decreases expected in fiscal 2007plans across all segments largely tied to synergies from the effects of the diesel engine emissions standards changes.

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        The Company expects the completion of its acquisition of JLG for $3.2 billion to significantly transform its business in fiscal 2007 and set the foundation for future growth prospects. The Company expects the transaction to close in December 2006. However, the Company cannot provide any assurance that it will complete the transaction. JLG had sales of $2.29 billion and operating income of $263.0 million, including a $14.6 million gain on the sale of certain assets, in its fiscal year ended July 31, 2006. JLG estimated on September 25, 2006 that its sales would grow by 20% to 25% in its fiscal year ending July 31, 2007. Accordingly, JLG is a large acquisition relative to Oshkosh’s stand-alone sales and operating income estimates for its fiscal year ended September 30, 2007 of $3.65 to $3.75 billion and $373.0 to $385.0 million, respectively. The Company agreed to acquire JLG to:

        The Company anticipates that the integration of JLG’s business and practices with Oshkosh will be a major effort that will consume much of its management’s time for about two years. The acquisition will substantially increase the Company’s financial leverage and expose the Company to non-residential construction spending cycles. The Company understands the integration, leverage and other risks of the pending acquisition, but believes that the JLG acquisition offers a unique opportunity to capitalize onbe the Company’s estimateprimary drivers of strong non-residential construction spending in 2007 and 2008 and synergy opportunities, to diversify and balance its business segments and to provide the scale needed for the Company to sustain growth. The Company further believes that the current strength in its own defense business and in its estimates for the near term outlook for JLG’s business significantly mitigate the financial leverage risks of the acquisition and will permit the Company to substantially reduce its financial leverage over the next few years.

        The Company estimates that the JLG acquisition will be modestly accretive to its fiscal 2007 stand-alone estimated earnings and anticipates higher accretion for the acquisitionper share growth in fiscal 2008. The Company expects to provideSee “Fiscal 2008 Outlook” for further detailed estimatesdetails regarding the impact of the JLG acquisition in February 2007, at the time of the Company’s next earnings conference call, which follows the expected closing for the acquisition.fiscal 2008 estimates.

Results of Operations

Analysis of Consolidated Net Sales – Three Years Ended September 30, 20062007

        The following table presents net sales (see definition of net sales contained in Note 2 of the Notes to Consolidated Financial Statements) by business segment (in millions):

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        The following table presents net sales by geographic region based on product shipment destination (in millions):

29Fiscal 2007 Compared to Fiscal 2006

        Consolidated net sales increased $2.9 billion, or 84.0%, to $6.3 billion in fiscal 2007 compared to fiscal 2006. Net sales increased in all segments. The acquisitions of OSV, IMT and JLG contributed $2.7 billion of the sales increase in fiscal 2007.

        Access equipment net sales were $2,539.5 million in fiscal 2007. Access equipment sales represent sales of JLG from December 6, 2006, the date of its acquisition, through the end of the fiscal year. Since the date of acquisition, JLG has experienced strong demand in Europe and Asia for all products and in North America for aerial work platforms. The segment has also benefited from the start-up of production of Caterpillar-branded telehandlers. The segment experienced softer demand for its traditional telehandlers in North America as a result of a slowdown in residential construction.

        Defense segment net sales increased 7.5% to $1,416.5 million in fiscal 2007 compared to fiscal 2006. The increase compared to the prior year was attributable to an increase in sales of new and remanufactured trucks, offset by sharply lower parts and service sales. Sales of medium-payload tactical vehicles to the DoD in fiscal 2007 more than offset a decrease in international truck sales due to the completion of the U.K. Wheeled Tanker contract in the first quarter of fiscal 2007. The sharp decrease in parts and service sales resulted from the completion of several nonrecurring, large armor and armor installation projects in fiscal 2006.

        Fire & emergency segment net sales increased 18.8% to $1,142.2 million in fiscal 2007 compared to fiscal 2006. The acquisition of OSV added sales of $101.7 million in fiscal 2007. Sales rose 8.4% for other businesses in the segment, reflecting higher sales for all domestic business units, most notably fire apparatus and towing products. The increase in domestic fire apparatus sales reflected higher demand for chassis with engines purchased in advance of diesel engine emissions standards changes effective January 1, 2007, increased pricing and some market share gains. The increase in towing product sales reflected a higher mix of package sales, which include both a wrecker unit and a purchased chassis.

        Commercial segment net sales increased 4.9% to $1,248.3 million in fiscal 2007 compared to fiscal 2006 due to the addition of IMT for the full year and higher domestic refuse collection vehicle sales. The acquisition of IMT added net sales of $85.8 million in fiscal 2007. Domestic refuse collection vehicle sales were 23.9% higher in fiscal 2007 due to an increase in shipments to large U.S. commercial waste haulers and municipalities. A 10.2% decrease of concrete placement product sales in fiscal 2007 as compared to fiscal 2006, largely due to lower domestic concrete mixer volume subsequent to the January 1, 2007 changes to diesel engine emissions standards and a slowdown in residential construction, partially offset the increase in sales of refuse collection vehicles. European refuse collection vehicle sales were also down 9.2% in fiscal 2007 as compared to fiscal 2006 due to soft demand for the Company’s products in the United Kingdom, the lack of available chassis for mounting refuse collection vehicles in France during the first half of the fiscal year and some market share losses.

Fiscal 2006 Compared to Fiscal 2005

        Consolidated net sales increased 15.8% to $3.43$3.4 billion in fiscal 2006 compared to fiscal 2005. Net sales were up in all segments. The acquisitions of AKOSV and IMT contributed $32.4 million of the sales increase in fiscal 2006.

        Fire and emergency segment net sales increased 14.3% to $961.5 million in fiscal 2006 compared to fiscal 2005. The acquisition of AK contributed $16.5 million to the increase in fiscal 2006 net sales. Sales in the remaining businesses in the segment rose 12.3%, reflecting strong order rates for fire apparatus, ambulances and airport products.

        Defense segment net sales increased 24.1% to $1,317.2 million in fiscal 2006 compared to fiscal 2005. The sales increase arose from increased sales of new and remanufactured heavy-payload trucks to the DoD to support Operation Iraqi Freedom and higher shipments of wheeled tankers under the U.K. MoDMinistry of Defence (“MoD”) contract. Parts and service sales in fiscal 2006 were up slightly as armor sales offset a decrease in other parts and service sales.

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        Fire & emergency segment net sales increased 14.3% to $961.5 million in fiscal 2006 compared to fiscal 2005. The acquisition of OSV contributed $16.5 million to the increase in fiscal 2006 net sales. Sales in the remaining businesses in the segment rose 12.3%, reflecting strong order rates for fire apparatus, ambulances and airport products.

        Commercial segment net sales increased 9.6% to $1,190.3 million in fiscal 2006 compared to fiscal 2005. The acquisition of IMT contributed $15.9 million to the increase in fiscal 2006 net sales. Concrete placement sales were up 11.8% primarily due to strong demand in advance of diesel engine emissions standards changes effective January 1, 2007 offset by a lower mix of package sales involving a truck chassis and vehicle body. Domestic refuse collection vehicle sales were 0.8% higher due to an increase in shipments to large U.S. commercial waste haulers offset by a decrease in package sales. European refuse collection vehicle sales increased 8.4% in U.S. dollars due to higher unit volumes and higher pricing offset in part by unfavorable currency translation adjustments as a result of the increased strength of the U.S. dollar compared to the Euro.

Fiscal 2005 Compared to Fiscal 2004

        Consolidated net sales increased 30.8% to $2,959.9 million in fiscal 2005 compared to fiscal 2004. Net sales were up in all segments. The acquisitions of JerrDan, BAI, CON-E-CO and London contributed $193.9 million of the sales increase in fiscal 2005.

        Fire and emergency segment net sales increased 40.3% to $841.5 million in fiscal 2005 compared to fiscal 2004. The acquisitions of JerrDan and BAI contributed $139.3 million to the increase in fiscal 2005 net sales. Sales in the remaining businesses in the segment rose 18.1%, reflecting strong order rates for fire apparatus and higher airport product sales.

        Defense segment net sales increased 37.1% to $1,061.1 million in fiscal 2005 compared to fiscal 2004. The sales increase arose from a near doubling in parts and service sales and higher sales of new and remanufactured heavy-payload trucks to the DoD to support Operation Iraqi Freedom.

        Commercial segment net sales increased 19.7% to $1,085.7 million in fiscal 2005 compared to fiscal 2004. The acquisitions of CON-E-CO and London contributed $54.6 million to fiscal 2005 net sales. Concrete placement sales, other than sales by CON-E-CO and London, were up 9.8% primarily due to higher unit sales volumes as industry order levels began to improve following a two-year downturn and an increased mix of package sales. Domestic refuse sales were 31.2% higher due to increased shipments to large U.S. commercial waste haulers. European refuse sales increased 3.2% in U.S. dollars due to favorable currency translation adjustments as a result of the increased strength of the Euro compared to the U.S. dollar offset in part by lower unit volumes and lower pricing in some end markets.

Analysis of Consolidated Operating Income – Three Years Ended September 30, 20062007

        The following table presents operating income by business segment (in millions):

Fiscal 2007 Compared to Fiscal 2006

        Consolidated operating income increased 81.1% to $590.3 million, or 9.4% of sales, in fiscal 2007 compared to $325.9 million, or 9.5% of sales, in fiscal 2006. The acquisitions of OSV, IMT and JLG contributed $287.7 million of the operating income increase in fiscal 2007. The slight decrease in operating income as a percentage of sales was generally due to lower margins in our defense and commercial segments.

        Access equipment segment operating income was $268.4 million, or 10.6% of sales, in fiscal 2007. Operating income for the access equipment segment in fiscal 2007 included charges of $14.0 million related to the revaluation of inventory as of the JLG acquisition date and $56.1 million for the recurring amortization of JLG intangible and tangible assets recorded as part of the preliminary purchase accounting for the JLG acquisition.

        Defense segment operating income increased 1.1% to $245.0 million, or 17.3% of sales, in fiscal 2007 compared to $242.2 million, or 18.4% of sales, in fiscal 2006. The decrease in operating income as a percentage of sales during fiscal 2007 reflected an adverse truck product mix, inefficiencies on the start-up of a contract and lower negotiated margins on the renewal of the FHTV contract, offset in part by the benefit of higher sales and relatively flat operating expenses.

        Fire & emergency segment operating income increased 19.4% to $107.5 million, or 9.4% of sales, in fiscal 2007 compared to $90.0 million, or 9.4% of sales, in fiscal 2006. The acquisition of OSV added operating income of $8.1 million in fiscal 2007. Operating income for the other businesses in the segment increased 10.4% in fiscal 2007 compared to fiscal 2006. The increase in operating income in fiscal 2007 compared to fiscal 2006 was primarily the result of strong sales and improved margins at the Company’s domestic fire apparatus business as a result of ongoing cost reduction initiatives and a decrease in operating losses at the Company’s ambulance business.

        Commercial segment operating income decreased 12.9% to $57.7 million, or 4.6% of sales, in fiscal 2007 compared to operating income of $66.2 million, or 5.6% of sales, in fiscal 2006. The acquisition of IMT added $11.2 million of operating income in fiscal 2006. Operating income for the other businesses in the segment fell 30.6% in fiscal 2007 compared to fiscal 2006 due to a $19.3 million operating loss sustained at the Company’s European refuse collection vehicle operations versus operating income of $2.9 million in fiscal 2006. The operating loss at the Company’s European refuse collection vehicle operations in fiscal 2007 resulted primarily from lower unit volumes, increased warranty provisions and charges totaling $9.7 million in connection with a reduction in its European refuse collection vehicle business salaried and hourly workforce, the closure of an underutilized facility and other adjustments related to the plan to turn around this business.

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        Corporate operating expenses and inter-segment profit eliminations increased $15.8 million to $88.3 million, or 1.4% of sales, in fiscal 2007 compared to fiscal 2006 due to higher personnel costs, higher professional services fees and increased travel expenses, offset in part by lower acquisition investigation and related costs.

        Consolidated selling, general and administrative expenses increased 81.5% to $512.5 million, or 8.1% of sales, in fiscal 2007 compared to $282.4 million, or 8.2% of sales, in the prior year. Consolidated operating expenses as a percentage of sales have remained relatively flat despite the increased amortization expense related to purchased intangible and tangible assets from the OSV, IMT and JLG acquisitions, due to the leveraging of fixed costs over higher acquisition-related sales.

Fiscal 2006 Compared to Fiscal 2005

        Consolidated operating income increased 22.0% to $325.9 million, or 9.5% of sales, in fiscal 2006 compared to $267.2 million, or 9.0% of sales, in fiscal 2005. The increase in income as a percentage of sales was generally due to the margin improvements within the commercial segment and a disproportionate increase in defense sales, which generally hashave higher margins than sales in the fire and& emergency and commercial segments, offset in part by higher corporate expenses.

        Fire and emergency segment operating income increased 13.0% to $90.0 million, or 9.4% of sales, in fiscal 2006 compared to $79.6 million, or 9.5% of sales, in fiscal 2005. Operating income at AK was break-even for fiscal 2006 due to the impact of purchase accounting adjustments. The increase in operating income in fiscal 2006 compared to fiscal 2005 was primarily due to the higher sales and a lower mix of towing equipment package sales. The decrease in operating income margin as a percent of sales in fiscal 2006 was the result of a write-off of inventory and other charges totaling $4.0 million, or 0.4% of sales, at the Company’s ambulance facility of which approximately $2.5 million arose out of intentional misstatements of accounting records by a former employee.

Defense segment operating income increased 15.2% to $242.3$242.2 million, or 18.4% of sales, compared to $210.2 million, or 19.8% of sales, in fiscal 2005. The increase in operating income in fiscal 2006 was the result of higher sales of new and remanufactured heavy-payload trucks, offset in part by a decrease in sales of higher margin parts and services. Fiscal 2005 operating income also benefited from cumulative margin adjustments totaling $24.7 million to the MTVR base contract that increased operating income margins for the segment by 2.3%. The MTVR base contract was accounted for under the percentage-of-completion method of accounting and was completed in June 2005.

        Fire & emergency segment operating income increased 13.0% to $90.0 million, or 9.4% of sales, in fiscal 2006 compared to $79.6 million, or 9.5% of sales, in fiscal 2005. Operating income at OSV was break-even for fiscal 2006 due to the impact of purchase accounting adjustments. The increase in operating income in fiscal 2006 compared to fiscal 2005 was primarily due to the higher sales and a lower mix of towing equipment package sales. The decrease in operating income margin as a percent of sales in fiscal 2006 was the result of a write-off of inventory and other charges totaling $4.0 million, or 0.4% of sales, at the Company’s ambulance facility of which approximately $2.5 million arose out of intentional misstatements of accounting records by a former employee.

Commercial segment operating income increased 177.7% to $66.2 million, or 5.6% of sales, in fiscal 2006 compared to operating income of $23.8 million, or 2.2% of sales, in fiscal 2005. The acquisition of IMT contributed $1.7 million of operating income in fiscal 2006. Operating income for the other businesses in the segment grew 170.8% in fiscal 2006 compared to fiscal 2005 due to higher pricing and much higher body-only unit volume in North America and the achievement of a profit at the Company’s European refuse collection vehicle operations of $2.9 million in fiscal 2006, compared to a loss of $8.6 million in fiscal 2005. The improvement in operating income for the European refuse operationcollection vehicle operations was primarily the result of the restructuring of that business in fiscal 2004 and 2005 to reduce costs.

        Corporate operating expenses and inter-segment profit eliminations increased $26.2 million to $72.6 million, or 2.1% of sales, in fiscal 2006 compared to fiscal 2005 due to increases in personnel costs related to new hires, restrictednonvested stock awards and incentive bonuses, an $8.0 million increase in acquisition investigation and related costs, an additional $6.5 million related to the expensing of stock options due to the adoption of SFAS No. 123(R) and $3.3 million related to the Company’s new office in China. Favorable settlements of product liability matters aggregating $4.2 million also benefited the prior year results.

        Consolidated selling, general and administrative expenses increased to 8.2% of sales in fiscal 2006 compared to 7.7% of sales in fiscal 2005 as a result of the increase in corporate operating expenses.

Fiscal 2005 Compared to Fiscal 2004

        Consolidated operating income increased 48.1% to $267.2 million, or 9.0% of sales, in fiscal 2005 compared to $180.4 million, or 8.0% of sales, in fiscal 2004. The increase in income as a percentage of sales was generally due to efficiencies realized from the substantially higher sales during the period and a disproportionate increase in fire and emergency and defense sales, which generally have higher margins than the commercial segment.

        Fire and emergency segment operating income increased 44.9% to $79.6 million, or 9.5% of sales, in fiscal 2005 compared to $55.0 million, or 9.2% of sales, in fiscal 2004. The acquisitions of JerrDan and BAI contributed $11.8 million of the increase in operating income in fiscal 2005. Operating income for the other businesses in the segment grew 23.9% in fiscal 2005 compared to fiscal 2004 due to higher sales and a substantially improved sales mix of custom pumpers, aerials and airport products.

        Defense segment operating income increased 64.4% to $210.2 million, or 19.8% of sales, compared to $127.9 million, or 16.5% of sales, in fiscal 2004. The largest contributor to the increase in operating income in fiscal 2005 was the near doubling of relatively higher-margin parts and service sales arising from DoD requirements to support Operation Iraqi Freedom. Substantially higher sales of relatively higher-margin new and remanufactured heavy-payload trucks also contributed to the increase in operating income in fiscal 2005. Earnings in fiscal 2005 further benefited from cumulative life-to-date adjustments totaling $24.7 million to increase MTVR base contract margins from 7.6% to 10.1%, including $23.1 million related to prior year revenues. The MTVR margin adjustments resulted from lower than expected material cost escalation and better than expected overhead absorption related to higher defense production volumes resulting from the requirements of Operation Iraqi Freedom. Fiscal 2004 operating income benefited from $19.5 million of MTVR base contract margin adjustments.

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        Commercial segment operating income decreased 31.6% to $23.8 million, or 2.2% of sales, in fiscal 2005 compared to operating income of $34.8 million, or 3.8% of sales, in fiscal 2004. The acquisitions of CON-E-CO and London contributed $2.4 million of operating income in fiscal 2005. Operating income margins were lower in fiscal 2005 principally due to an $8.6 million operating loss for the Company’s European refuse operations, an increase of $6.8 million compared to fiscal 2004. The operating loss arose from a $3.7 million workforce reduction charge, lower unit volumes, lower pricing in many end markets and increased material, labor and warranty costs associated with the launch of a new Geesink-branded rear loader. Operating income of concrete placement and domestic refuse operations in the segment, other than CON-E-CO and London, was down 17.9% in fiscal 2005 compared to fiscal 2004. This decrease in operating income was the result of relatively flat pricing at a time of higher steel and component costs which offset the overhead absorption benefits of higher unit volumes.

        Consolidated selling, general and administrative expenses decreased to 7.7% of sales in fiscal 2005 compared to 8.1% of sales in fiscal 2004. Such expenses as a percentage of sales declined due to cost control in a period of rapidly rising sales. Corporate operating expenses and inter-segment profit eliminations increased $9.1 million to $46.4 million in fiscal 2005 compared to fiscal 2004 due to increases in personnel costs related to new hires, restricted stock awards granted in late fiscal 2004, employee termination costs and higher incentive bonuses, which more than offset a $4.2 million favorable product liability settlement in the first quarter of fiscal 2005.

Analysis of Non-Operating Income Statement Items – Three Years Ended September 30, 20062007

Fiscal 2007 Compared to Fiscal 2006

        Interest expense net of interest income increased $193.7 million to $194.5 million in fiscal 2007 compared to fiscal 2006, largely as a result of borrowings incurred in connection with the JLG acquisition.

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        Other miscellaneous loss of $0.1 million in fiscal 2007 relates primarily to net foreign currency transaction losses.

Fiscal 2006 Compared to Fiscal 2005

        Interest expense net of interest income decreased $4.4 million to $0.7 million in fiscal 2006 compared to fiscal 2005. Fiscal 2006 results reflected lower average borrowings outstanding for most of fiscal 2006 until the Company acquired AKOSV and IMT for cash and incurred debt totaling $272.8 million in the fourth quarter of fiscal 2006.

        Other miscellaneous loss of $0.2 million in fiscal 2006 relates primarily to foreign currency transaction losses.

Provision for Income Taxes – Three Years Ended September 30, 2007

Fiscal 2007 Compared to Fiscal 2006

        The effective income tax rate for fiscal 2007 was 34.2% compared to 37.3% in fiscal 2006. The rate decrease related to the impacts of the JLG acquisition, a favorable tax audit settlement, a favorable European tax ruling and the re-instatement of the federal research and development tax credit.

Fiscal 2006 Compared to Fiscal 2005

        The effective income tax rate for fiscal 2006 was 37.3% compared to 39.3% in fiscal 2005. The decrease related to the impact of a new manufacturing deduction, higher income tax credits and higher earnings in relatively low-tax rate states.

Equity in Earnings of Unconsolidated Affiliates – Three Years Ended September 30, 2007

Fiscal 2007 Compared to Fiscal 2006

        Equity in earnings of unconsolidated affiliates, net of income taxes, of $7.3 million in fiscal 2007 and $2.3 million in fiscal 2006 primarily represent the Company’s equity interest in a lease financing partnership, a commercial entity in Mexico and a joint venture in Europe. The increase in equity in earnings in fiscal 2007 represents improved performance of the commercial entity in Mexico and the addition of the joint venture in Europe, which was acquired as part of the acquisition of JLG.

Fiscal 2006 Compared to Fiscal 2005

        Equity in earnings of unconsolidated affiliates, net of income taxes, of $2.3 million in fiscal 2006 and $2.9 million in fiscal 2005 represented the Company’s equity interest in OMFSPa lease financing partnership and in a concrete mixer and refuse packer manufacturercommercial entity in Mexico.

        Minority interest in earnings of $0.5 million represented the 25.0% interest in BAI held by BAI management shareholdings.

Financial Condition

Fiscal 2005 Compared to Fiscal 2004Year Ended September 30, 2007

        Interest expense net of interest incomeDuring fiscal 2007, cash and cash equivalents increased $0.9by $53.2 million to $5.2$75.2 million inat September 30, 2007. Cash provided from operating activities of $406.0 million and borrowings of $3.1 billion funded the acquisition of JLG, capital expenditures of $102.0 million, repayments of the Revolving Credit Facility (as defined below) of $79.9 million and of long-term debt of $96.8 million, debt issuance costs of $34.9 million, and dividends of $29.6 million. Cash provided from operations during fiscal 20052007 increased compared to fiscal 2004. Fiscal 2005 results reflected higher average borrowings as a result of acquisitions and increased working capital requirements associated with the Company’s U.K. wheeled tanker contract.

        Other miscellaneous loss of $1.9 million in fiscal 2005 relates primarily to foreign currency transaction losses.

        The effective income tax rate for fiscal 2005 was 39.3% compared to 37.3% in fiscal 2004. The increase related2006 due to an increase in earnings before depreciation and amortization of $154.1 million, offset in part by higher working capital requirements primarily related to the acquisition of JLG. The acquisition of JLG has resulted in increases in trade accounts receivable, inventory, and trade accounts payable as JLG’s cash cycle is longer than the Company’s historical operations. These higher working capital requirements are partially offset by a valuation allowancedecrease in inventory of existing businesses resulting from the utilization of the additional inventory purchased in fiscal 2006 in advance of the diesel engine emissions standards changes effective January 2007. The Company’s cash flow from operations has fluctuated, and will likely continue to fluctuate significantly, from quarter to quarter, due to changes in working capital requirements arising principally from seasonal fluctuations in sales, the start-up or conclusion of large defense contracts and the timing of receipt of individually large performance-based payments from the DoD.

        Cash paid for certain net operating loss carryforwards in The Netherlands and increased state income taxes associated with higher earnings in relatively higher-tax rate states.

        Equity in earnings of unconsolidated affiliates, net of income taxes, of $2.9was $82.3 million in fiscal 2005 and $2.22007 compared to $136.0 million in fiscal 2004 represented2006. Cash paid for income taxes decreased despite higher pre-tax income due to the Company’s equity interest in OMFSPimpact of acquisition-related deductible expenses and in a concrete mixerincreased tax credits and refuse packer manufacturer in Mexico.

        Minority interest in earnings of $0.6 million represented the 25.0% interest in BAI held by BAI management shareholdings.incentives.

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Financial Condition

        Working capital of $646.9 million at September 30, 2007 was $525.5 million higher than at September 30, 2006. The increase from September 30, 2006 was due primarily to the acquisition of JLG, which historically has operated with higher working capital than the Company did prior to its acquisition of JLG.

        Total capitalization of $4.5 billion at September 30, 2007 included short-term debt of $0.1 billion, long-term debt (excluding current maturities) of $3.0 billion and shareholders’ equity of $1.4 billion. The Company’s total capitalization at September 30, 2006 was $1.2 billion. Total debt as a percentage of total capitalization at September 30, 2007 was 68.7% compared to 7.8% at September 30, 2006. The increase in total capitalization was due to borrowings incurred to finance the acquisition of JLG.

Fiscal Year Ended September 30, 2006

        During fiscal 2006, cash and cash equivalents decreased by $105.5 million to $22.0 million at September 30, 2006. Cash provided from operating activities of $177.4 million, net borrowings under the Company’s credit facilities of $64.4 million and proceeds of stock option exercises of $3.5 million were used to acquire AKOSV and IMT for $272.8 million, fund capital expenditures of $56.0 million and pay dividends of $27.1 million. Cash provided from operations during fiscal 2006 decreased compared to fiscal 2005 due to a decrease in customer advances, largely from the DoD, and an increase in inventories. In fiscal 2006, the Company purchased additional inventory in advance of the diesel engine emissions standards changes effective January 2007. Also, cash provided from operations in fiscal 2005 included $25.3 million in tax benefits related to stock option exercises. In fiscal 2006, certain tax benefits related to stock option exercises is reported as a financing item in accordance with SFAS No. 123(R).

        Cash paid for income taxes was $136.0 million in fiscal 2006 compared to $81.4 million in fiscal 2005. Cash paid for income taxes increased due to the higher level of earnings and lower deductions related to stock optionoptions exercises.

        The Company’s debt-to-total capital ratio at September 30, 2006 was 7.8% compared to 2.9% at September 30, 2005.

        Assuming completion of the pending JLG acquisition, the Company will enter into a new senior secured credit facility to fund the JLG acquisition. The Company expects the acquisition will substantially increase the Company’s financial leverage and expose the Company to non-residential construction spending cycles. The Company expects its debt-to-total capital ratio to be over 75% immediately after the pending acquisition of JLG. The Company believes that the current strength in its own defense business and in its estimates for the near term outlook for JLG’s business mitigate the financial leverage risks of the acquisition and will permit the Company to substantially reduce its financial leverage over the next two years.

Fiscal Year Ended September 30, 2005

        During fiscal 2005, cash and cash equivalents increased by $97.4 million to $127.5 million at September 30, 2005. Cash provided from operating activities of $212.3 million (which included $25.3 million in tax benefits related to the exercise of stock options) and cash proceeds from the exercise of stock options of $24.3 million funded the acquisitions of CON-E-CO and London for $31.3 million, repayments of borrowings of $51.6 million, capital expenditures of $43.2 million and dividends of $16.0 million. Cash provided from operations during fiscal 2005 increased compared to fiscal 2004 due to the increase in net income and proportionately higher increases in customer advances, largely from the DoD, than in operating assets required to support the Company’s fiscal 2005 sales increase.

        In fiscal 2005, inventories increased sharply to support higher sales levels, including production under the U.K. wheeled tanker contract. Customer advances represented a significant source of cash in fiscal 2005 due to higher performance-based payments from the DoD and higher advances associated with fire apparatus orders compared to prior year levels.

        Cash paid for income taxes was $81.4 million in fiscal 2005 compared to $46.4 million in fiscal 2004. Cash paid for income taxes increased due to the higher level of earnings offset in part by increased deductions in fiscal 2005 for the tax benefits of stock option exercises and pension contributions.

        At September 30, 2005, the Company had repaid all of its revolving credit facility borrowings, with the exception of €15.0 million designated as a hedge of its investment in BAI.

Liquidity and Capital Resources

        The Company had cash and cash equivalents of $22.0$75.2 million and $408.2$525.4 million of unused availability under the terms of its revolving credit facilityRevolving Credit Facility (as defined below) as of September 30, 2006.2007. The Company’s primary cash requirements include working capital, capital expenditures, dividends, and interest and principal payments on indebtednessindebtedness.

        On December 6, 2006, to finance the acquisition of JLG and potentially, future acquisitions. In September 2004,to refinance a previous credit facility, the Company obtainedentered into a new unsecured $500.0syndicated senior secured credit agreement (“Credit Agreement”) with various financial institutions. The Credit Agreement consists of a five-year $550.0 million senior revolving credit facility (“revolving credit facility”Revolving Credit Facility”) expiring inand two term loan facilities (“Term Loan A” and “Term Loan B,” and collectively, the “Term Loan Facility”). The $500 million Term Loan A requires principal payments of $12.5 million, plus interest, due quarterly through September 2009. Availability under the revolving credit facility was reduced by borrowings2011, with a final principal payment of $71.4$262.5 million and outstanding lettersdue December 6, 2011. The $2.6 billion Term Loan B requires principal payments of credit$6.5 million, plus interest, due quarterly through September 2013, with a final principal payment of $20.4$2,424.5 million due December 6, 2013. As a result of excess available cash at September 30, 2006. The Company could seek to increase the revolving credit facility up to an aggregate maximum outstanding amount of $750.0 million, subject to the satisfaction of certain conditions, including2007, the Company not beingprepaid its quarterly principal payments which were originally due in default under terms of its revolving credit facilityDecember 2007 and the identification of lenders willing to provide additional commitments. The Company expects its primary sources of cash to be cash flow from operations, cash and cash equivalents on hand at September 30, 2006 and borrowings.

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        The Company’s cash flow from operations has fluctuated, and will likely continue to fluctuate significantly, from quarter to quarter, due to changes in working capital requirements arising principally from seasonal fluctuations in sales, the start-up or conclusion of large defense contracts and the timing of receipt of individually large performance-based payments from the DoD.March 2008.

        The Company’s current revolving credit facilityobligations under the Credit Agreement are guaranteed by certain of its domestic subsidiaries, and the Company guarantees the obligations of certain of its subsidiaries under the Credit Agreement to the extent such subsidiaries borrow directly under the Credit Agreement. The Credit Agreement is also secured by a first-priority, perfected lien and security interests in all of the equity interests of the Company’s material domestic subsidiaries and certain of the Company’s other subsidiaries and 65% of the equity interests of each material foreign subsidiary of the Company and certain other subsidiaries of the Company; and, subject to certain customary, permitted lien exceptions, substantially all other personal property of the Company and certain subsidiaries; and all proceeds thereof.

        The Credit Agreement contains various restrictions and covenants, including (1) requirements that the Company maintain certain financial ratios at prescribed levels; and (2) restrictions on the ability of the Company and certain of its subsidiaries to consolidate or merge, create liens, incur additional indebtedness and dispose of assets. Further, these bank agreements provide that the Company’s leverage ratio (as defined) shall not exceed 3.5 to 1.0 and that the Company shall not permit its domestic earnings before interest, taxes, depreciation and amortization (as defined) to be less than $150.0 million. The Company’s current revolving credit facility does not restrict the Company’s ability to pay dividends as long as the Company maintains a minimum net worth of $550.0 million plus the net proceeds of all equity issuances and 50% of the Company’s positive net income from the date of the current revolving credit facility.

        Interest rates on borrowings under the Company’s revolving current credit facility are variable and are equal to the “Base Rate” (which is equal to the higher of a bank’s reference rate and the federal funds rate plus 0.50%) or the “Offshore Rate” (which is a bank’s inter-bank offered rate for U.S. dollars in off-shore markets) plus a margin of 0.70% for Offshore Rate loans under the Company’s revolving credit facility as of September 30, 2006. The margins are subject to adjustment, up or down, based on whether certain financial criteria are met. The weighted average interest rate on the revolving credit facility borrowings outstanding at September 30, 2006 was 6.22%. The Company presently has not entered into interest rate swap arrangements relative to its current revolving credit facility to limit exposure to future increases in interest rates.

        Based upon current and anticipated future operations and excluding the impact of the JLG acquisition, the Company believes that these capital resources will be adequate to meet future working capital, debt service and other capital requirements for fiscal 2007.

        In October 2006, the Company entered into a definitive agreement to acquire JLG for total consideration, including transaction costs and assumed debt, of approximately $3.2 billion. The Company intends to finance the acquisition with the proceeds of senior secured revolving and term credit facilities in an aggregate principal amount of $3.5 billion arranged by Bank of America, N.A. and JPMorgan Chase Bank, N.A., which will replace the Company’s current revolving credit facility and refinance most of the Company’s and JLG’s currently outstanding debt. The Company expects the new credit facilities to consist of a $500.0 million five-year revolving credit facility, a $400.0 million five-year term loan facility due in quarterly installments of $10.0 million plus interest with a balloon payment due at maturity and a $2.6 billion seven-year term loan facility due in quarterly installments of $6.5 million plus interest with a balloon payment due at maturity. The Company anticipates that certain material subsidiaries of the Company will guarantee the credit facilities and the Company will guarantee the obligations of its subsidiaries designated as borrowers under the credit facilities. The CompanyCredit Agreement also anticipates the credit facilities to be secured by a first-priority perfected lien and security interests in all of the equity interests of the Company’s material domestic subsidiaries; 65% of the equity interests of the Company’s direct material foreign subsidiaries or any guarantor; subject to certain customary permitted lien exceptions, all other personal property of the Company and the guarantors; and all proceeds thereof.

        The Company expects the new agreement to contain various restrictions and covenants, including (1) requirements that the Company maintain certain financial ratios at prescribed levels; and (2) restrictions on the ability of the Company and certain of its subsidiaries to consolidate or merge, create liens, incur additional indebtedness and dispose of assets. The Company anticipates the new credit agreement will requirerequires maintenance on a rolling four quarter basis of a maximum leverage ratio (as defined) of 5.50x through June5.25x for the fiscal quarter ending on September 30, 2007, reducing to 5.25x on September 30, 2007, 4.75x for the fiscal quarters ending on December 31, 2007 through September 30, 2008, 4.25x for the fiscal quarters ending on December 31, 2008 through September 30, 2009 and 3.75 x on December 31, 2009,3.75x for fiscal quarters ending thereafter, and a minimum interest coverage ratio (as defined) of 2.50x, in each case tested as of the last day of each fiscal quarter. The Company expects the new credit agreement to limitwas in compliance with these covenants at September 30, 2007.

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        The Credit Agreement limits the amount of its dividends and other types of distributions that the Company may pay to $40$40.0 million during any fiscal year plus the positive result of (x) 25% of the cumulative net income of the Company and its consolidated subsidiaries for all fiscal quarters ending after the effective date of the new credit agreement,December 6, 2006, minus (y) the cumulative amount of all dividends and other types of distributions made in any fiscal year ending after such effective dateDecember 6, 2006 that exceeded $40exceed $40.0 million.

        The Company expects interestInterest rates on borrowings under the new credit facilities to beRevolving Credit and Term Loan Facilities are variable bearing interest at a rateand are equal to LIBOR plus a specified margin or, for U.S. dollar-denominated loans only, the base rate (defined as“Base Rate” (which is equal to the higher of a bank’s primereference rate and the federal funds rate plus 0.50%0.5% or a bank’s “Prime Rate”) or the “Off-Shore” or “LIBOR Rate” (which is a bank’s inter-bank offered rate for U.S. dollars in off-shore markets) plus a specified margin, in each case which may be adjusted upwardmargin. The margins are subject to adjustment, up or downward dependingdown, based on whether certain financial criteria are satisfied.met. During the second quarter of fiscal 2007, the Company amended its Credit Agreement to reduce the interest rate spread on the Term Loan B by 25 basis points over the term of the loan. The weighted average interest rate on borrowings outstanding under the Credit Agreement was 7.41% at September 30, 2007.

        To manage interest rate risk, the Company presently intends to enterentered into an amortizing interest rate swap arrangements relativeagreement on January 11, 2007, which effectively fixed the interest payment of a portion of certain floating-rate debt instruments. The swap, which has a termination date of December 6, 2011, effectively fixed the LIBOR-based interest rate on the debt in the amount of the notional amount of the swap at 5.105% plus the applicable spread based on the terms of the Credit Agreement. The initial notional amount of the swap was $2.5 billion and is reduced in varying amounts annually each December until the termination date. Under the terms of the swap agreement, the notional amount of the swap will decline to $2.0 billion in December 2007. Neither the new credit facilitiesCompany nor the counterparty, which is a prominent financial institution, are required to limit exposurecollateralize their respective obligations under these swaps. The Company is exposed to loss if the counterparty defaults.

        The Company has observed an increase in requests for longer payment terms in the access equipment segment as a result of competitive factors in that market. To the extent these requests are granted, this will adversely impact liquidity; however, based upon current and anticipated future increases in interest rates.operations, the Company believes that capital resources will be adequate to meet working capital, debt service and other capital requirements for fiscal 2008.

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Contractual Obligations, Commercial Commitments and Off-Balance Sheet Arrangements

        Following is a summary of the Company’s contractual obligations and payments due by period following September 30, 20062007 (in millions):

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        The Company incurs contingent limited recourse liabilities with respect to customer financing activities in the Company signed a definitive agreementaccess equipment segment. For additional information relative to acquire JLG for $28 per share. Total consideration, including transaction costs and assumed debt, is $3.2 billion in cash. The acquisition has been approved byguarantees, see Note 12 of the Board of Directors of each company and is subjectNotes to customary closing conditions, including approval under the Hart-Scott-Rodino Act and similar laws outside the U.S. and the approval by the shareholders of JLG. The definitive agreement includes a break-up fee of $100 million.Consolidated Financial Statements.

        The following is a summary of the Company’s commercial commitments (in millions):

        McNeilus has a $16.9 million investment in an unconsolidated general partnership, OMFSP, which offers lease financing to customers of the Company. McNeilus and an unaffiliated third party, BA Leasing & Capital Corporation (“BALCAP” — a subsidiary of Bank of America Corporation), are general partners in OMFSP. Each of the two general partners has identical voting, participating and protective rights and responsibilities in OMFSP. See Note 6 of the Notes to Consolidated Financial Statements.

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Certain Assumptions

        The expectations reflected in the forward-looking statements in this Annual Report on Form 10-K, in particular those with respect to projected sales, costs, earnings, andcapital expenditures, debt levels and cash flows, are based in part on certain assumptions made by the Company, some of which are referred to in, or as part of, the forward-looking statements. These assumptions include, without limitation, that the Company will be ablethose relating to close and integrate JLG as well as integrate AK and IMT and achieve targeted synergies for each acquisition; the Company’s ability to turnaroundintegrate the acquired JLG business; the Company’s ability to turn around the Geesink Norba Group business sufficiently to support its current valuation resulting in no non-cash impairment charge for Geesink Norba Group goodwill; the Company’s ability to grow its operating income despite anticipated lower industry demand for several of its businesses resulting from changes to diesel engine emissions standards effective January 1, 2007;charges; the Company’s estimates for the level of concrete placement activity, housing starts, non-residential construction spending and mortgage rates; the performance of the U.S. and European economies generally; the Company’s expectations as to timing of receipt of sales orders and payments and execution and funding of defense contracts; the Company’s ability to achieve cost reductions and operating efficiencies, in particular at JLG, McNeilus, Geesink and Medtec; the Geesink Norba Group;availability of defense truck carcasses for remanufacturing; the anticipated level of production and margins associated with the Family of Heavy Tactical VehiclesFHTV contract, the Indefinite Demand/Indefinite Quantity truck remanufacturing contract, the MTVRMedium Tactical Vehicle Replacement follow-on contract, the LVSRLogistics Vehicle System Replacement contract and international defense truck contracts; the expected level and timing of DoD procurement of replacement parts and services and funding thereof;Company’s ability to produce defense trucks at increased levels in fiscal 2008; the Company’s estimates for capital expenditures of rental and construction companies for JLG’s products, of municipalities for fire and& emergency and refuse products,collection vehicles, of airports for aircraft rescue and snow removal products and of large commercial waste haulers generally and with the Company; federal funding levels for U.S. Department of Homeland Security and spending by governmental entities on homeland security apparatus; the Company’s estimates of the impact of changing fuel prices and credit availability on capital spending of chassis components, including engines and commercial chassis generally;towing operators; the Company’s planned spending on product development and bid and proposal activities with respect to defense truck procurement competitions and the outcome of such competitions; the expected level of commercial “package” body and purchased chassis sales compared to “body only” sales; the Company’s estimates of the impact of changing fuel prices and credit availability on capital spending of towing operators; anticipated levels of capital expenditures;expenditures by the Company; the Company’s estimates for costs relating to litigation, product warranty, product liability, insurance, stock options, and restricted stockperformance share awards, bad debts, personnel and raw materials; the Company’s estimates for debt levels, interest rates, foreign exchange rates, working capital needs and effective tax rates; and that the Company does not complete any further acquisition other than JLG.acquisitions in the short term. The Company cannot provide any assurance that the assumptions referred to in the forward-looking statements or otherwise are accurate or will prove to have been correct. Any assumptions that are inaccurate or do not prove to be correct could have a material adverse effect on the Company’s ability to achieve the results that the forward-looking statements contemplate.

Fiscal 20072008 Outlook

        The Company estimates that fiscal 20072008 consolidated net sales will range between $3.65$7.1 billion and $3.75$7.3 billion, an increase from fiscal 20062007 net sales of 6.5%12.6% to 9.4%15.7%. The Company estimates the acquisitions of AK and IMT will add $213 million to sales in fiscal 2007 because fiscal 2006 results only included their results, including sales of $324 million since the dates of acquisition. All estimates and comparisons are to the Company’s fiscal 20062007 results and exclude the impact of the anticipated JLG acquisition.assume no new acquisitions.

        The Company expects access equipment segment sales in fiscal 2008 will increase about 20.0%. The increase in sales reflects an additional two months of sales as JLG’s results were only included in the Company’s consolidated results since the date of acquisition, strong sales in Europe and other international markets, offset in part by lower sales in North America due to continued weakness in the residential construction market and an expected mid-economic cycle slow-down in non-residential spending.

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        Based on additional funding provided for the Company’s truck programs in recently enacted federal spending bills intended to fund Operation Iraqi Freedom, the Company is projecting defense segment sales to grow 20.0% to 25.0% in fiscal 2008, including an increase in defense parts and service sales due to higher estimated armor kit sales. The projected increase in defense sales in fiscal 2008 does not include any sales from potential mine resistant ambush protected vehicle contract awards.

        The Company expects fire and& emergency segment sales percentage growth percentage to be in the mid-teens5.0% to 10.0% in fiscal 2007,2008, as a result of an estimated mid-single digit organic growth and the addition of AK.growth. The Company estimates the acquisition of AK will add $114 million to segment sales in fiscal 2007 because fiscal 2006 results only included its operation, including sales of $16.5 million since the date of acquisition. The organic growth reflects lower industrya pause in demand following the diesel engine emissions standards changes effective January 2007 as well as anticipated price increases and some market share gains.

        The Company projects defenseestimates the commercial segment sales to increase by $125 million to $175 milliondecrease slightly in fiscal 20072008, due to additional federal funding which includes requirements for new trucks to meet the DoD’s requirements for Operation Iraqi Freedom, while it projects defense parts and service sales to approximate fiscal 2006 sales.

        The Company estimates the commercial segment’s sales to decrease in the low single digit percentage range in fiscal 2007 due to lower industryweak demand for concrete mixers and refuse packers in the U.S. subsequent tofollowing the diesel engine emissions standards changes effective January 2007 partially offset by the addition of IMT.and continued weak residential construction. The Company estimatesexpects demand will not return until very late in the acquisition of IMT will add $99 million to segment sales in fiscal 2007 because fiscal 2006 results only included its operation, including sales of $15.9 million since the date of acquisition. The Company projects that demand for concrete placement and domestic refuse products in calendar 2007 will decline about 10% to 20% due to the diesel engine emissions standards changes. Since the Company’s fiscal year, straddles the effective date of the standards changes, the Company does not expect the decline to affect it until sometime after the first quarter of fiscal 2007.if at all. The Company expects that Geesink Norba GroupEuropean refuse collection vehicle product sales will also be downup slightly in fiscal 20072008 due to slowbetter chassis availability in France and higher demand in the United Kingdom and the lack of available chassis in France.Kingdom.

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        The Company is projecting consolidated operating income to be upof between 14.4%$690.0 million and 18.1%$715.0 million in fiscal 2007 resulting in operating income of between $373 million and $385 million.2008.

        The Company is projecting fire and emergency segmentaccess equipment margins to be up 50150 to 200 basis points in fiscal 2007 as compared to fiscal 2006,2008, reflecting the benefits of additional volume, favorable foreign currency, benefits of cost reduction initiatives. The Company expects that AK’s operating income margins will exceed 10.0% in fiscal 2007.

        The Company is projecting defenseinitiatives and the elimination of certain non-recurring purchase accounting charges. Defense segment operating income margins are projected to remain relatively flatdecrease 200 to 250 basis points in fiscal 2007 as compared to fiscal 2006.

        In2008, reflecting lower margins on the commercialrenewal of the FHTV contract. Fire & emergency segment the Company projects operating income margins are projected to be up over50 to 100 basis points in fiscal 20072008, reflecting the benefits of price increases and cost reduction initiatives. Commercial segment operating income margins are projected to be down slightly in fiscal 2008 as a result of the acquisition of IMT, continued profitabilityanticipated restructuring charges at the Company’s European refuse collection vehicle business and the benefits of cost reduction initiatives. The Company expects that IMT operating income margins will exceed 10.0% in fiscal 2007.lower domestic sales.

        The Company estimates that corporate operating expenses and inter-segment profit eliminations will increase $7.5 million to approximately $80.0$30.0 million in fiscal 2007.2008. The increase reflects additional estimated expense associated with stock-based compensation awards, the additioncosts of a new data centerseveral large information technology projects and the investment in additional staff. The Company estimates that interest expense net of interest income and other expenses will increase $4.8 million to $5.5$215.0 to $225.0 million in fiscal 20072008 largely due to indebtedness incurred to fund the AK and IMT acquisitions.inclusion of interest on the JLG acquisition debt for an entire year.

        The Company estimates that in fiscal 20072008 its effective income tax rate will decreasedecline to approximately 0.3% to 37.0%,34.0% as a result of the continued phase-in of the domestic manufacturing deduction, a favorable tax ruling in Europe and increased earnings in lower tax rate countries. The Company estimates that equity in earnings of unconsolidated affiliates will approximate $1.8$3.5 to $4.0 million.

        During fiscal 2008, the Company expects to reduce its outstanding debt by approximately $300 to $400 million, and minority interestresulting in earnings willdebt of $2.65 to $2.75 billion at September 30, 2008. The Company anticipates capital spending to approximate $0.8 million.$110 million in fiscal 2008.

        These estimates result in the Company’s estimateestimates of fiscal 20072008 net income between $232$317.5 million and $239$333.0 million and earnings per share between $3.05$4.15 and $3.15 per share.$4.35. The Company expects its earnings per share to be down in the first quarter of fiscal 20072008 to $0.50$0.35 to $0.55$0.40 per share compared to $0.72$0.55 per share in the first quarter of fiscal 20062007 due to a toughseasonally weak quarter and a difficult comparison quarter into the prior year anddue to the later timingengine emissions related pre-buy in the first quarter of estimated new and remanufactured defense truck sales. The Company estimates that about 60.0% of its estimated annual earnings per share in fiscal 2007 will be realized in its third and fourth quarters.2007.

Critical Accounting Policies

        The Company prepares its consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect reported amounts and related disclosures. Actual results could differ from those estimates. The Company considers the following policies to be the most critical in understanding the judgments that are involved in the preparation of the Company’s consolidated financial statements and the uncertainties that could impact the Company’s financial condition, results of operations and cash flows.

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        Revenue Recognition: The Company recognizes revenue on equipment and parts sales when contract terms are met, collectibility is reasonably assured and a product is shipped or risk of ownership has been transferred to and accepted by the customer. Revenue from service agreements is recognized as earned, when services have been rendered.

        The Company records revenues under certain long-term, fixed-price defense contracts using the percentage-of-completion method of accounting, generally using either the cost-to-cost or units accepted method as the measurement basis for effort accomplished. Profits expected to be realized on contracts are based on management estimates of total contract sales value and costs at completion. Estimated amounts for contract changes and claims are included in contract sales only when realization is estimated to be probable. Assumptions used for recording sales and earnings are recognized as a cumulative life-to-date adjustment in the period of change to reflect revisions in contract value and estimated costs. In the period in which it is determined that a loss will be incurred on a contract, the entire amount of the estimated loss is charged to cost of sales.

        The complexity of the estimation process and all issues related to assumptions, risks, and uncertainties inherent with the application of the cost-to-cost method of accounting affect the amounts reported in the Company’s financial statements. A number of internal and external factors affect the cost of sales estimates, including labor rate and efficiency variances, overhead rate estimates, revised estimates of warranty costs, estimated future material prices, and customer specification changes. If business conditions were different, or if the Company had used different assumptions in the application of this and other accounting policies, it is likely that materially different amounts would be reported in the financial statements. Bid and proposal costs are expensed as incurred.

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        In fiscal 2005, following completion        The Company accounts for certain equipment lease contracts as sales-type leases. The present value of contractually-required performance testing, the Company began initial deliveriesall payments, net of wheeled tanker systems (comprised of a truck chassis and water or fuel tank trailer) under a multi-year requirements contract with the U.K. MoD. The contract, valued at 160.5 million British Sterling ($250.4 million)executory costs (such as legal fees), calls for delivery of 357 wheeled tanker systems over a 22 month period beginning in February 2005. The contract provides that the Company is paid within 30 days of delivery of the wheeled tanker systems to the U.K. MoD. The U.K. MoD has up to 90 days following system delivery to reject the delivered wheeled tanker systems. Wheeled tanker systems remain in the Company’s inventory and cash received in payment for these systems is recorded as deferred revenue, until the earlierrelated cost of the date thatequipment is charged to cost of sales, certain profit is deferred in accordance with lease accounting rules and interest income is recognized over the wheeled tanker system has been accepted byterms of the customer orleases using the dateeffective interest method.

        The Company enters into rental purchase guarantee agreements with some of its customers. These agreements are normally for a term of no greater than twelve months and provide for rental payments with a guaranteed purchase at the rejection right lapses (generally 90 days from system delivery) at which timeend of the agreement. At the inception of the agreement, the Company records the full amount due under the agreement as revenue and the related cost of the equipment is charged to cost of sales.

        The Company ships equipment on a limited basis to certain customers on consignment, but the Company recognizes revenue. the revenues only upon final sale of the equipment by the consignee. At September 30, 2007, the Company had $9.5 million of inventory on consignment.

Sales Incentives: The terms for sales transactions with some of the Company’s distributors and customers may include specific volume-based incentives, which are calculated and paid or credited on account as a percentage of actual sales. The Company accounts for these incentives as sales discounts at the time of revenue recognition as a direct reduction of sales. The Company reviews its accrual for sales incentives on a quarterly basis and any adjustments are reflected in fiscal 2006 under this contract totaled $126.3 million.current earnings.

        Goodwill and Other Intangible Assets:In conformity with U.S. GAAP, goodwill and indefinite-lived intangible assets are tested for impairment annually, or more frequently if events or changes in circumstances indicate that the assets might be impaired. Indicators of potential impairment include situations involving significant adverse changes in business climate, adverse actions by regulators, unanticipated competition, loss of key personnel, changes in technology or markets and operating losses, among others. The Company performs its annual review in the fourth quarter of each fiscal year.

        Recoverability of goodwill is evaluated using a two-step process. The first step involves a comparison of the fair value of a reporting unit with its carrying value. If the carrying value of the reporting unit exceeds its fair value, the second step of the process involves a comparison of the implied fair value and carrying value of the goodwill of that reporting unit. If the carrying value of the goodwill of a reporting unit exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. Reporting units are business components at or one level below the operating segment level for which discrete financial information is available.

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        The Company performs impairment reviews for its reporting units using a fair-value method based on management’s judgments and assumptions. The fair value represents the amount at which a reporting unit could be bought or sold in a current transaction between willing parties on an arms-length basis. The estimated fair value is then compared with the carrying amount of the reporting unit, including recorded goodwill. The Company is subject to financial statement risk to the extent that goodwill and indefinite-lived intangible assets become impaired. Any impairment review is, by its nature, highly judgmental as estimates of future sales, earnings and cash flows are utilized to determine fair values. However, the Company believes that it has conducted thorough and competent valuations of its goodwill and other intangible assets annually, resulting in no impairment of goodwill. See “Critical Accounting Estimates.”

        Warranty: SalesGuarantees of the Indebtedness of Others:The Company enters into agreements with finance companies whereby its equipment is sold to a finance company, which, in turn, sells or leases the equipment to an end user customer. In some instances, the Company retains an obligation to the finance companies in the event the customer defaults on the financing. In accordance with Financial Accounting Standards Board (“FASB”) Interpretation No. (“FIN”) 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” the Company recognizes the greater of the fair value of the guarantee or the contingent liability required by Statement of Financial Accounting Standards (“SFAS”) No. 5, “Accounting for Contingencies.” Reserves are established related to these guarantees based upon the Company’s products generally carry typical explicit manufacturers’ warrantiesunderstanding of the current financial position of the underlying customers and based on termsestimates and judgments made from information available at that are generally acceptedtime. If the Company becomes aware of deterioration in the Company’s marketplaces. Thefinancial condition of the customer/borrower or of any impairment of the customer/borrower’s ability to make payments, additional allowances are considered. Although the Company records provisionsmay be liable for estimated warrantythe entire amount of a customer/borrower’s financial obligation under guarantees, its losses would generally be mitigated by the value of any underlying collateral including financed equipment, the finance company’s inability to provide clear title of foreclosed equipment to the Company and other conditions.

        In addition, prior to the acquisition of JLG by the Company, JLG had monetized a substantial portion of its finance receivables through a series of syndications, limited recourse financings and other monetization transactions. In connection with some of these monetization transactions, JLG has a loss exposure associated with the pledged finance receivables related costs atto possible defaults by the timeobligors under the terms of salethe contracts that comprise these finance receivables. Reserves have been established related to these monetization transactions based upon the financial position of these customers and based on historical warranty loss experienceestimates and periodically adjustsjudgments made from available information. If the financial condition of these provisionsobligors were to reflect actual experience. Certain warranty and other related claims involve mattersdeteriorate resulting in an impairment of dispute that ultimately are resolved by negotiation, arbitration or litigation. At times, warranty issues arise which are beyond the scope of the Company’s historical experience. The Company provides for any such warranty issues as they become known and estimable. It is reasonably possible that from timetheir ability to timemake payments, additional warranty and other related claims could arise from disputes or other matters beyond the scope of the Company’s historical experience.accruals would be required.

        Product Liability: Due to the nature of the Company’s products, the Company is subject to product liability claims in the normal course of business. A substantial portion of these claims and lawsuits involve the Company’s access equipment, concrete placement and domestic refuse collection vehicle businesses, while such lawsuits in the Company’s defense and fire and& emergency businesses have historically been limited. To the extent permitted under applicable law, the Company maintains insurance to reduce or eliminate risk to the Company. Most insurance coverage includes self-insured retentions that vary by business segment and by year. As of September 30, 2006,2007, the Company maintainedis generally self-insured retentions of $1.0for future claims up to $3.0 million per claim for each of its businesses.claim.

        The Company establishes product liability reserves for its self-insured retention portion of any known outstanding matters based on the likelihood of loss and the Company’s ability to reasonably estimate such loss. There is inherent uncertainty as to the eventual resolution of unsettled matters due to the unpredictable nature of litigation. The Company makes estimates based on available information and the Company’s best judgment after consultation with appropriate experts. The Company periodically revises estimates based upon changes to facts or circumstances. The Company also utilizes actuarial methodologies to calculate reserves required for estimated incurred but not reported claims as well as to estimate the effect of the adverse development of claims over time.

Warranty: Sales of the Company’s products generally carry typical explicit manufacturers’ warranties based on terms that are generally accepted in the Company’s marketplaces. The Company records provisions for estimated warranty and other related costs at the time of sale based on historical warranty loss experience and periodically adjusts these provisions to reflect actual experience. Certain warranty and other related claims involve matters of dispute that ultimately are resolved by negotiation, arbitration or litigation. At times, warranty issues arise that are beyond the scope of the Company’s historical experience. The Company provides for any such warranty issues as they become known and estimable. It is reasonably possible that from time to time additional warranty and other related claims could arise from disputes or other matters beyond the scope of the Company’s historical experience.

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Critical Accounting Estimates

        Management of the Company has discussed the development and selection of the following critical accounting estimates with the Audit Committee of the Company’s Board of Directors, and the Audit Committee has reviewed the Company’s disclosures relating to such estimates in this Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Allowance for Doubtful Accounts and Reserves for Receivables:The Companyevaluates the collectibility of receivables based on a combination of factors. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations, a specific reserve is recorded against amounts due to reduce the net recognized receivable to the amount reasonably expected to be collected. Additional reserves are established based upon the Company’s perception of the quality of the current receivables, the current financial position of the Company’s customers, past experience of collectibility and underlying economic conditions. If the financial condition of the Company’s customers were to deteriorate resulting in an impairment of their ability to make payments, additional reserves would be required.

        The Company believes that the estimated allowance for doubtful accounts and reserves for receivables comprise a “critical accounting estimate” because changes in the allowance and reserves can materially affect net income and the estimate requires management to predict customers’ liquidity. The estimate of the allowance for doubtful accounts and reserves for receivables related to the Company’s access equipment segment is a critical accounting estimate.

        Warranty: The Company’s products generally carry explicit warranties that extend from six months to five years, based on terms that are generally accepted in the marketplace. Selected components included in the Company’s end products (such as engines, transmissions, tires, etc.) may include manufacturers’ warranties. These manufacturers’ warranties are generally passed on to the end customer of the Company’s products and the customer would generally deal directly with the component manufacturer.

        The Company’s policy is to record a liability for the expected cost of warranty-related claims at the time of the sale. The amount of warranty liability accrued reflects management’s best estimate of the expected future cost of honoring Company obligations under the warranty plans. The Company believes that the warranty accounting estimate is a “critical accounting estimate” because:because changes in the warranty provision can materially affect net income; the estimate requires management to forecast estimated product usage levels by customers; in the case of new models, components or technology there may be a different, resulting in higher levellevels of warranty claims experience than with existing, mature products; and certain warranty and other related claims involve matters of dispute that ultimately are resolved by negotiation, arbitration or litigation. The estimate for warranty obligations is a critical accounting estimate for each of the Company’s operating segments.

        Historically, the cost of fulfilling the Company’s warranty obligations has principally involved replacement parts, labor and sometimes travel for any field retrofit campaigns. Over the past three fiscal years, the Company’s warranty cost as a percentage of sales has ranged from 0.84% of sales to 1.23% of sales. Warranty costs tend to be higher shortly after new product introductions, especially those introductions involving new technologies, when field warranty campaigns may be necessary to correct or retrofit certain items. Accordingly, the Company must make assumptions about the number and cost of anticipated field warranty campaigns. The Company’s estimates are based on historical experience, the extent of pre-production testing, the number of units involved and the extent of new features/components included in new product models.

        Each quarter, the Company reviews actual warranty claims experience to determine if there are any systemic defects that would require a field campaign. Also, based upon historical experience, warranty provision rates on new product introductions are established at higher than standard rates to reflect increased expected warranty costs associated with any new product introduction.

        At times, warranty issues can arise which are beyond the scope of the Company’s historical experience. If the estimate of warranty costs in fiscal 20062007 increased or decreased by 50%,50 basis points, the Company’s accrued warranty costs, costs of sales and operating income would each change by $21.1$31.5 million or 37.2%35.8%, 0.8%0.6% and 6.5%5.3%, respectively.

        Business Combinations.Combinations: The allocation of purchase price for business combinations requires management estimates and judgment as to expectations for future cash flows of the acquired business and the allocation of those cash flows to identifiable intangible assets in determining the estimated fair value for purchase price allocation purposes. If the actual results differ from the estimates and judgments used in these estimates, the amounts recorded in the financial statements could result in a possible impairment of the intangible assets and goodwill or require acceleration of the amortization expense of finite-lived intangible assets. To aid in establishing the value of goodwill and other intangible assets at the time of acquisition, the Company typically involves a professional appraisal company.

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        GoodwillGoodwill:: In evaluating the recoverability of goodwill, it is necessary to estimate the fair value of the reporting units. In making this assessment, management estimatesutilizes both discounted anticipatedfuture cash flows (income approach) and a comparison of multiples based on merger and acquisition transactions of comparable companies (market approach). The Company calculates estimated discounted future cash flows of a reporting unit based on a number of factors including historical operating results, business plans and market conditions. Rates used to discount estimated cash flows are dependent upon interest rates and the Company’s estimated cost of capital at a point in time. There are inherent uncertainties related to these factors and management’s judgment in applying them to the analysis of goodwill impairment. It is possible that assumptions underlying the impairment analysis will change in such a manner that impairment in value may occur in the future.

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        While the Company’s Geesink Norba Group reported operating income        As part of $2.9 million in fiscal 2006, its fourth quarter performance resulted in a loss. In addition, its backlog was down 25.0% asannual assessment of September 30, 2006 due to a decrease in orders in the United Kingdom and France. As a result of this loss and decrease in backlog,goodwill, the Company continued to monitor whetherperformed an impairmentextensive review of the Geesink Norba Group goodwill had occurred.associated with Geesink. Goodwill associated with the Geesink, Norba Group, which was recorded in connection with the acquisition of this business in July 2001, totaled €107.6 million as of September 30, 20062007 ($136.5153.5 million based on the exchange rate as of September 30, 2006)2007). Most of the European refuse markets served by the Geesink Norba Group have been in a recession since 2001. While experiencing a slight improvement in fiscal 2005 and 2006, the Company believes that refuse collection vehicle market sales volumes in Europe declined by more than 20% from fiscal 2001 levels to fiscal 2004 levels and that pricing in several of its markets declined by 5% to 10% over this period.

        During fiscal 2004 and 2005, Geesink operated at a loss due to the Company launchedweak European economy, declines in selling prices in its markets, operational inefficiencies and increased material, labor and warranty cost related to the launch of a new Geesink-branded smooth-sided, rear loader refuse collection vehicle and the Valu€Pak, value-priced refuse collection vehicle into the European refuse market to spur demand for the Company’s products. Following the launch of the new Geesink-branded rear loader, its product cost substantially exceeded the Company’s estimated product cost and initial production units involved substantial warranty claims until certain design changes were madeloader. Geesink operated at a profit in fiscal 2005 and 2006. These issues caused the2006, during which time Geesink, Norba Groupseeking a low-cost country to begin reporting operating lossesproduce products, established a production facility in the business in the quarter ended June 30, 2004. The Company made a management change and assigned its lean team to the business in early fiscal 2005 to resolve the product design issues and to substantially reduce the manufacturing costs of the Geesink-branded rear loader.Eastern Europe. As Geesink started up this operation, existing facilities became underutilized. As a result, Geesink’s excess capacity and overhead has in part, along with soft market demand for its products in the United Kingdom, the lack of available chassis for mounting refuse collection vehicles in France, some market share losses and the charges described below led to operating losses of $19.3 million (€14.4 million) in fiscal 2007. In fiscal 2007, Geesink began an initiative to reduce operating costs, eliminate excess headcount and close an underutilized facility. In connection with these and other initiatives, the Company recorded charges totaling $9.7 million for workforce reductions, a $3.7 million workforce reduction chargefacility closure and other adjustments in fiscal 20052007. At the same time, the Company developed a plan to rightsize its workforcefurther leverage Geesink’s low-cost country manufacturing capabilities in The Netherlands and to commence a strategy to outsourceEastern Europe by insourcing certain activities to lower cost manufacturing sites. In the fourth quarter of fiscal 2005 and the first three quarters of fiscal 2006, the Geesink Norba Group returned to profitability. During the fourth quarter, the United Kingdom market began to decline as a result of a decrease in government funding and the consolidation of two of Geesink’s primary customers in that country. In addition, limited chassis availability in France reduced orders in that country.fabrications.

        The Company expects that the businessGeesink will continue to incur operating losses throughthroughout fiscal 2008 due to the first two quarters of fiscal 2007, but thatcosts to implement the actions required to turn around the business, will be modestly profitable in fiscal 2007.including the proposed rationalization of an additional facility. The Company believes that profitability will continue to improve in fiscal 20082009 following the improvementconsolidation of the markets in the United Kingdom and France,facilities, additional cost reduction activities and other planned actions. Based largely on the Company’s estimated benefits of its cost reductionfacility rationalization initiatives started in fiscal 2007, planned facility rationalization initiatives in fiscal 2005 and 20062008 and the improvement in the end markets,insourcing of fabrications to Geesink’s Eastern European facility, the Company developed long-term projections of estimated cash flows from the Geesink Norba Group to assess the fair value of the business. As a result, the Company determined that the fair value of the Geesink Norba Group exceeded its carrying value at September 30, 2006,2007, and therefore determined that the goodwill recorded in connection with the acquisition of the Geesink Norba Group was not impaired. Although any assessment of goodwill is dependent on projections of future operating results, the Company believes that it conducted a thorough and competent valuation of the Geesink Norba Group at September 30, 20062007 in support of its assessment. The Company intends to continue to review the results of its initiatives and to monitor the valuation of its investment in the Geesink Norba Group as appropriate during fiscal 2007.2008.

        To the extent that the Geesink Norba Group is not able to achieve expected sales and operating income performanceprogress on its turnaround initiatives in fiscal 2007 and fiscal 2008, the Company could be required to record a goodwill impairment charge. The range of potential charge would be based on a number of factors, including the speed of the European economic recovery, the results of the Company’s cost reduction activities, Geesink Norba Group’sthe timing and results of the insourcing of fabrications to Geesink’s Eastern European facility, Geesink’s operating performance, competition, required future capital expenditures, interest rates and long-term growth assumptions. The Company cannot provide any assurance that future goodwill impairment tests will not result in a charge to future earnings.

        Deferred Income Tax Assets: The Company records deferred income tax assets and liabilities for differences between the book basis and tax basis of the related net assets. The Company records a valuation allowance, when appropriate, to adjust deferred tax asset balances to the amount management expects to realize. Management considers, as applicable, the amount of taxable income available in carryback years, future taxable income and potential tax planning strategies in assessing the need for a valuation allowance. The Company will require future taxable income in The Netherlands in order to fully realize the net deferred tax asset in that jurisdiction. At September 30, 2006,2007, a valuation allowance has been established to reserve for the net deferred tax asset related to all tax loss carryforwards in The Netherlands.

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        Benefit Plans: The pension benefit obligation and related pension income are calculated in accordance with SFAS No. 87, “Employer’s Accounting for Pensions”, and are impacted by certain actuarial assumptions, including the discount rate and the expected rate of return on plan assets. These rates are evaluated on an annual basis considering such factors as market interest rates and historical asset performance. Actuarial valuations at September 30, 20062007 used a weighted average discount rate of 5.75%6.00% and an expected rate of return on plan assets of 8.25%8.00%. A 0.5% decrease in the discount rate would increase annual pension expense by approximately $1.4$1.8 million. A 0.5% decrease in the expected return on plan assets would increase ourthe Company’s annual pension expense by approximately $0.7$0.9 million.

        The Company’s other postretirement benefits obligation and related expense are calculated in accordance with SFAS No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions”Pensions,” and are impacted by certain actuarial assumptions, including health care trend rates. An increase of one percentage point in health care costs would increase the accumulated postretirement benefit obligation by $3.4$3.3 million and would increase the annual service and interest cost by $0.5$0.6 million. A corresponding decrease of one percentage point would decrease the accumulated postretirement benefit by $3.1$3.0 million and decrease the annual service and interest cost by $0.4$0.5 million.

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        The Company’s benefit plan assumptions are determined by using a benchmark approach as well as currently available actuarial data.

New Accounting Standards

Accounting Changes:In May 2005, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 154, “Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3.” Previously, APB Opinion No. 20, “Accounting Changes” and FASB Statement No. 3, “Reporting Accounting Changes in Interim Financial Statements” required the inclusion        Refer to Note 2 of the cumulative effect of changes in accounting principle in net incomeNotes to Consolidated Financial Statements for a discussion of the periodimpact of the change. SFAS No. 154 requires companies to recognize a change in accounting principle, including a change required by a new accounting pronouncement when the pronouncement does not include specific transition provisions, retrospectively to prior period financial statements. SFAS No. 154 is effective for the Company beginning October 1, 2006. Adoption of SFAS No. 154 is not expected to have a material impactstandards on the Company’s consolidated financial condition, results of operations or cash flows.statements.

Hybrid Financial Instruments: In February 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial Instruments,” which amends SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” and SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.” SFAS No. 155 provides guidance to simplify the accounting for certain hybrid instruments by permitting fair value remeasurement for any hybrid financial instrument that contains an embedded derivative, as well as to clarify that beneficial interests in securitized financial assets are subject to SFAS No. 133. In addition, SFAS No. 155 eliminates a restriction on the passive derivative instruments that a qualifying special-purpose entity may hold under SFAS No. 140. SFAS No. 155 is effective for the Company for all financial instruments acquired, issued or subject to a new basis occurring after September 30, 2006. Adoption of SFAS No. 155 is not expected to have a material impact on the Company’s financial condition, results of operations or cash flows.

Servicing of Financial Assets: In March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets,” which amends SFAS No. 140. SFAS No. 156 provides guidance which addresses the recognition and measurement of separately recognized servicing assets and liabilities, common with mortgage securitization activities, and provides an approach to simplify efforts to obtain hedge accounting treatment. SFAS No. 156 is effective for the Company for all separately recognized servicing assets and liabilities acquired or issued after September 30, 2006. Adoption of SFAS No. 156 is not expected to have a material impact on the Company’s financial condition, results of operations or cash flows.

Uncertainty in Income Taxes: In June 2006, the FASB issued FASB Interpretation No. (“FIN”) 48, “Accounting for Uncertainty in Income Taxes,” an interpretation of FASB Statement No. 109. FIN 48 provides guidance for the recognition, derecognition and measurement in financial statements of tax positions taken in previously filed tax returns or tax positions expected to be taken in tax returns. FIN 48 requires an entity to recognize the financial statement impact of a tax position when it is more likely than not that the position will be sustained upon examination. If the tax position meets the more-likely-than-not recognition threshold, the tax effect is recognized at the largest amount of the benefit that is greater than fifty percent likely of being realized upon ultimate settlement. The Company will be required to adopt FIN 48 as of October 1, 2007, with any cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. The Company is currently evaluating the impact of FIN 48 on the Company’s financial condition, results of operations and cash flows.

Fair Value Measurements: In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS No. 157 clarifies the definition of exchange price as the price between market participants in an orderly transaction to sell an asset or transfer a liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. The Company will be required to adopt SFAS No. 157 as of October 1, 2008. The Company is currently evaluating the impact of SFAS No. 157 on the Company’s financial condition, results of operations and cash flows.

Pension Accounting: In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R),” which requires the employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in it’s statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. The Company will be required to adopt SFAS No. 158 as of September 30, 2007. The Company is currently evaluating the impact of SFAS No. 158 on the Company’s financial condition, results of operations and cash flows.

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Customers and Backlog

        Sales to the U.S. government comprised approximately 35.3%23% of the Company’s net sales in fiscal 2006.2007. No other single customer accounted for more than 10.0%10% of the Company’s net sales for this period. A substantial majority of the Company’s net sales are derived from customer orders prior to commencing production.

        The Company’s backlog atas of September 30, 2006 decreased 1.5%2007 increased 66.0% to $1,914.3$3,177.8 million compared to $1,944.1$1,914.3 million at September 30, 2005. Fire and emergency2006. The access equipment segment, which the Company acquired after September 30, 2006, contributed backlog increased 22.2% to $643.0of $854.1 million at September 30, 2006 compared2007. The defense segment backlog increased 82.4% to $526.2$1,554.8 million at September 30, 2005 due to improving domestic municipal markets, market share gains and the inclusion of $44.7 million of backlog related to AK, which was acquired in fiscal 2006. The defense segment backlog decreased 29.0%2007 compared to $852.4 million at September 30, 2006 compareddue to $1,199.9the renewal of the FHTV contract and additional contract funding received in the May 2007 federal supplemental spending bill. The defense segment backlog included $53.9 million related to the LVSR contract. Fire & emergency segment backlog decreased 10.2% to $577.5 million at September 30, 2005 due2007 compared to timing of FHTV contract renewal, continued production under U.K. wheeled tanker contract and a slow-down in sales of parts and services for the DoD. The Company anticipates that its defense segment backlog will rise over the next six months as DoD contracts are executed against recent federal budget bills.$643.0 million at September 30, 2006. Commercial segment backlog increased 92.2%decreased 54.3% to $191.4 million at September 30, 2007 compared to $418.9 million at September 30, 2006 compared to $217.9 million at September 30, 2005. Orders continued to remain strong in North America2006. Prior year fire & emergency and commercial segment backlogs included orders in advance of diesel engine emissions standards changes effective January 1, 2007. Commercial segment backlogs were also impacted by lower residential construction in fiscal 2007. Unit backlog for refuse packerscollection vehicles was up 165.8% domestically.down 68.6% domestically compared to September 30, 2006. Unit backlog for front-discharge and rear-discharge concrete mixers was up 80.4%were down 79.0% and 108.2%80.3%, respectively.respectively, compared to September 30, 2006. Unit backlog for refuse packerscollection vehicles was down 25.0%up 52.4% in Europe as a result of slow order intakebetter demand in the United Kingdom and the return of chassis supply issuesavailability in France. Approximately $22.8 million of the overall increase in commercial segment backlog related to IMT, which the Company acquired in fiscal 2006. Approximately 3.0%9.7% of the Company’s September 30, 20062007 backlog is not expected to be filled in fiscal 2007.2008.

        Reported backlog excludes purchase options and announced orders for which definitive contracts have not been executed. Additionally, backlog excludes unfunded portions of the FHTV, MTVR, ID/IQ and LVSR contracts. As of September 30, 2006, only $25.7 million of the anticipated LVSR contract has been funded and included in backlog. Backlog information and comparisons thereof as of different dates may not be accurate indicators of future sales or the ratio of the Company’s future sales to the DoD versus its sales to other customers.

Financial Market Risk

        The Company is exposed to market risk from changes in foreign exchange rates, interest rates and certain commodity prices. To reduce the risk from changes in foreign exchange and interest rates, the Company selectively uses financial instruments. The Company does not hold or issueAll hedging transactions are authorized and executed pursuant to clearly defined policies and procedures, which strictly prohibit the use of financial instruments for tradingspeculative purposes.

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Interest Rate Risk

        The Company’s earnings exposure related to adverse movements in interest rates is primarily derived from outstanding floating rate debt instruments that are indexed to short-term market interest rates. The Company, as needed, uses interest rate swaps to modify its exposure to interest rate movements. In January 2007, the Company entered into an interest rate swap to reduce the risk of interest rate changes associated with the Company’s variable rate debt issued to finance the acquisition of JLG. The swap effectively fixes the variable portion of the interest rate on debt in the amount of the notional amount of the swap at 5.105% plus the applicable spread based on the terms of the Credit Agreement. The initial notional amount of the swap was $2.5 billion and is reduced in varying amounts annually each December until its termination on December 6, 2011. Under the terms of the swap agreement, the notional amount of the swap will decline to $2.0 billion in December 2007.

        The portion of the Company’s interest expense isnot effectively fixed in the interest rate swap remains sensitive to changes in the interest rates in the U.S. and off-shore markets. In this regard, changes in U.S. and off-shore interest rates affect interest payable on the Company’s borrowings under its revolving credit facility. The Company has not historically utilized derivative securities to fixCredit Agreement. A 100 basis point increase or decrease in the average cost of the Company’s variable rate interest obligations or to make fixed-rate interest obligations variable. If short-term interest rates averaged two percentage points higherdebt, including outstanding swaps, would result in fiscal 2007 thana change in fiscal 2006, then the Company’spre-tax interest expense would increase, and pre-tax income would decrease byof approximately $0.5$5.5 million. These amounts are determined on an annual basis by considering the impact of the hypothetical interest rates on borrowings at September 30, 2007, taking into account the Company’s borrowing cost,interest rate swap, but do not consider the effects of the reduced level of overall economic activity that could exist in such an environment. Further, in the event of a change of such magnitude, management would likely take actions to mitigate the Company’s exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the foregoing sensitivity analysis assumes no changes in the Company’s financial structure other than as noted.

Commodity Risk

        The Company is a purchaser of certain commodities, including steel, aluminum and composites. In addition, the Company is a purchaser of components and parts containing various commodities, including steel, aluminum, rubber and others which are integrated into the Company’s end products. The Company generally buys these commodities and components based upon market prices that are established with the vendor as part of the purchase process. The Company does not use commodity financial instruments to hedge commodity prices.

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        The Company generally obtains firm quotations from its suppliers for a significant portion of its orders under firm fixed-pricefirm-fixed-price contracts in its defense segment. In the Company’s access equipment, fire and& emergency and commercial segments, the Company generally attempts to obtain firm pricing from most of its suppliers, consistent with backlog requirements and/or forecasted annual sales. To the extent that commodity prices increase and the Company does not have firm pricing from its suppliers, or its suppliers are not able to honor such prices, then the Company may experience margin declines to the extent it is not able to increase selling prices of its products.

Foreign Currency Risk

        The Company’s operations consist of manufacturing in the U.S.,United States, Belgium, Canada, The Netherlands, the United Kingdom, Italy, Sweden, MexicoFrance and Romania and sales and limited vehicle body mounting activities throughout the U.S. and in various European jurisdictions.on six continents. International sales were approximately 17.7%25% of overall net sales in fiscal 2006,2007, including approximately 9.0% of overall net sales in fiscal 20069% that involved export sales from the U.S. The majority of export sales in fiscal 20062007 were denominated in U.S. dollars. ForAs a result of the manufacture and sale of the Company’s U.S. operations,products in foreign markets, the Company generally purchases materials and component parts that are denominated in U.S. dollars and seeks customer payment in U.S. dollars for large multi-unit sales contracts, which span several months or years.

        The Company’s contract to provide wheeled tankers to the U.K. MoD provides that the Company shall invoice and be paid in British Sterling. The Company’s costs under this contract are payable in U.S. dollars, British Sterling and Euro. The Company has instituted a hedging program by entering into a series of forward foreign exchange contracts to sell British Sterling and Euro and purchase British Sterling and Euro to hedge a portion of the related U.S. dollar equivalent of these amounts. Should significant changes occur in the actual timing of forecasted British Sterling receipts under the U.K. wheeled tanker contract, the underlying forward foreign exchange contracts which have been designated as a hedge of such forecasted receipts may become partially ineffective which could lead to unintended earnings volatility.

        The Company’s earnings are affected by fluctuations in the value of the U.S. dollar, againstas compared to foreign currencies primarily as a resultin which certain of the effectsCompany’s transactions in foreign markets are denominated. Through the Company’s foreign currency hedging activities, the Company seeks primarily to minimize the risk that cash flows resulting from the sales of the translation of the Geesink Norba Group, BAI and London earnings from source currencies into U.S. dollars and Euro-denominated purchases of tank bodies and tank pumping systemsCompany’s products will be affected by changes in the defense segment, and hedging customer orders denominated in currencies other than the U.S. dollar.exchange rates.

        The Company may useenters into certain forward foreign currency exchange contracts to partiallymitigate the Company’s foreign exchange risk. These contracts qualify as derivative instruments under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”; however the Company has not designated all of these instruments as hedge againsttransactions under SFAS No. 133. Accordingly, the mark-to-market impact of these derivatives is recorded each period to current earnings effects of such fluctuations in exchange ratesalong with the offsetting foreign currency transaction gain/loss recognized on non-U.S. dollar denominated sales and purchases.the related balance sheet exposure. At September 30, 2006,2007, the Company hadwas managing $282.5 million (notional) of foreign currency contracts, including $265.8 million (notional) which are not designated as accounting hedges.

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        The following table quantifies outstanding forward foreign exchange contracts intended to purchase 10.8 million Euro ($13.2 million basedhedge non-U.S. dollar denominated cash, receivables and payables and the corresponding impact on the exchange rate asvalue of September 30, 2006) for settlement during the period from October 2006 through January 2007. At September 30, 2006, the Company had outstanding forward foreign exchange contracts to sell 15.4 million British Sterling ($22.6 million based on the exchange rate as of September 30, 2006) for settlement during the period from October 2006 through November 2006 to hedge outstanding firm sales commitments. A hypotheticalthese instruments assuming a 10% strengthening or weakeningappreciation/depreciation of the U.S. dollar relative to all other currencies on September 30, 2007 (in millions):

        As previously noted, the Company’s policy prohibits the trading of financial instruments for speculative purposes. It is important to note that gains and losses indicated in the sensitivity analysis would not have had a material impactbe offset by gains and losses on the Company’s fiscal 2006 earnings or cash flows. However, to a certain extent, foreign currency exchange rate movements may also affect the Company’s competitive position, as exchange rate changes may affect business practices, the Company’s cost structure compared to its competitors’ cost structures and/or pricing strategies of non-U.S. based competitors.

        Fluctuations in currency exchange rates may also impact the Company’s shareholders’ equity. Amounts invested in the Company’s non-U.S. subsidiaries are translated into U.S. dollars at the exchange rates in effect at year-end. The resulting translation adjustments are recorded in shareholders’ equity as cumulative translation adjustments. In connection with the Company’s acquisition of BAI in July 2004, the Company borrowed €15.0 million under its bank credit facilityunderlying receivables and designated such borrowing as a hedge of the Company’s net investment in BAI. As such, the impact of fluctuations in the U.S. dollar equivalent of the €15.0 million Euro-denominated debt is charged or credited directly to shareholders’ equity, offsetting, in part, adjustments to shareholders’ equity to record the cumulative translation of the Company’s investment in BAI. The cumulative translation adjustments component of shareholders’ equity increased $11.2 million in fiscal 2006 (net of the $1.0 million adjustment related to the BAI net investment hedge). Using the year-end exchange rates, the total amount invested in non-U.S. subsidiaries at September 30, 2006 was approximately $280.5 million.payables.

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        The following table quantifies firmly committed sales contracts and forecasted purchase requirements which are denominated in foreign currencies and related outstanding forward foreign exchange contracts intended to hedge those foreign currency exposures. Sales and purchase commitments are expressed in U.S. dollars based on the applicable currency exchange rate as of September 30, 2006 and 2005, respectively. The Company has no exposure in, or commitments for, fiscal year 2008 or thereafter.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The information under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Financial Market Risk” contained in Item 7 of this Form 10-K is hereby incorporated by reference in answer to this item.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Oshkosh Truck Corporation

We have audited the accompanying consolidated balance sheets of Oshkosh Truck Corporation and subsidiaries (the “Company”) as of September 30, 20062007 and 2005,2006, and the related consolidated statements of income, shareholders’ equity, and cash flows for each of the three years in the period ended September 30, 2006.2007. Our audits also included the financial statement schedule listed in the Table of Contents at Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements presents fairly, in all material respects, the financial position of Oshkosh Truck Corporation and subsidiaries as of September 30, 20062007 and 2005,2006, and the results of their operations and their cash flows for each of the three years in the period ended September 30, 2006,2007, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

As discusseddescribed in NotesNote 2 and 14 to the consolidated financial statements, effective October 1, 2005Consolidated Financial Statements, the Company changed its methodadopted Statement of accountingFinancial Accounting Standards No. 158,Employer’s Accounting for share-based compensation to adoptDefined Benefit Plans, on September 30, 2007, and Statement of Financial Accounting Standards No. 123 (revised 2004), “Share-Based Payment.”Share-based Payment, on October 1, 2005.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of September 30, 2006,2007, based on the criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated November 14, 200621, 2007 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/S/ DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin
November 14, 200621, 2007

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of
Oshkosh Truck Corporation

We have audited management’s assessment, included in the accompanyingManagement’s Report on Internal Control Over Financial Reporting, that Oshkosh Truck Corporation and subsidiaries (the “Company”) maintained effective internal control over financial reporting as of September 30, 2007, based on criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of September 30, 2007, is fairly stated, in all material respects, based on the criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2007, based on the criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended September 30, 2007 of the Company and our report dated November 21, 2007 expressed an unqualified opinion on those financial statements and financial statement schedule and included an explanatory paragraph regarding the Company’s adoption of a new accounting standard.

/S/ DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin
November 21, 2007

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OSHKOSH TRUCK CORPORATION
Consolidated Statements of Income
(In thousands,millions, except per share amounts)