(920) 502-3400

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

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock $0.01 par value		OSK		New York Stock Exchange

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.ý☒ Yes o☐ No

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).ý☒ Yes o☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filerý	☒	Accelerated filero	☐
Non-accelerated filero ~~(Do not check if a smaller reporting company)~~
	☐	Smaller reporting companyo	☐
		Emerging growth ~~Company~~ ocompany	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.o

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).o☐ Yes ý☒ No

As of ~~January 18, 2018, 74,645,959~~April 20, 2022, 65,794,923 shares of the registrant’s Common Stock were outstanding.

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~FORM10-Q INDEX~~

~~FOR THE QUARTER ENDED DECEMBER 31, 2017~~

Table of Contents

OSHKOSH CORPORATION

FORM10-Q INDEX



				Page
		PART I - FINANCIAL INFORMATION

ITEM 1.		FINANCIAL STATEMENTS (UNAUDITED)		1

		Condensed Consolidated Statements of Income for the	1
	Three Months Ended ~~December~~March 31, ~~2017~~2022 and ~~2016~~2021		1

		Condensed Consolidated Statements of Comprehensive Income for the	2
	Three Months Ended ~~December~~March 31, ~~2017~~2022 and ~~2016~~2021		2

		Condensed Consolidated Balance Sheets at March 31, 2022 and December 31, 2021		3
	~~December 31, 2017 and September 30, 2017~~

	Condensed Consolidated Statements of ~~Shareholders'~~Shareholders’ Equity for the	4
	Three Months Ended ~~December~~March 31, ~~2017~~2022 and ~~2016~~2021		4

		Condensed Consolidated Statements of Cash Flows for the	5
	Three Months Ended ~~December~~March 31, ~~2017~~2022 and ~~2016~~2021		5

		Notes to Condensed Consolidated Financial Statements		6

ITEM 2.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		3022

ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		4031

ITEM 4.		CONTROLS AND PROCEDURES		4132

		PART II - OTHER INFORMATION

ITEM 1.		LEGAL PROCEEDINGS		4233

ITEM 1A.		RISK FACTORS		4233

ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		4233

ITEM 4.		MINE SAFETY DISCLOSURES		4233

ITEM 6.	~~EXHIBITS~~	43EXHIBITS		34

SIGNATURES			44
		35

Table of Contents

~~Table of Contents~~

PARTI - FINANCIAL INFORMATION

~~ITEM 1.~~

ITEM 1.

FINANCIAL STATEMENTS

OSHKOSH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(InDollars in millions, except per share amounts; unaudited)

	Three Months Ended March 31,
	2022			2021
Net sales	$	1,945.7		$	1,889.0
Cost of sales		1,744.4			1,573.9
Gross income		201.3			315.1

Operating expenses:
Selling, general and administrative		169.2			172.0
Amortization of purchased intangibles		2.8			2.3
Total operating expenses		172.0			174.3
Operating income		29.3			140.8

Other income (expense):
Interest expense		(12.6	)		(11.8	)
Interest income		1.0			0.6
Miscellaneous, net		1.1			3.1
Income before income taxes and earnings (losses) of unconsolidated affiliates		18.8			132.7
Provision for income taxes		20.2			33.2
Income (loss) before earnings (losses) of unconsolidated affiliates		(1.4	)		99.5
Equity in earnings (losses) of unconsolidated affiliates		(0.7	)		0.1
Net income (loss)	$	(2.1	)	$	99.6

Earnings (loss) per share:
Basic	$	(0.03	)	$	1.45
Diluted		(0.03	)		1.44

Cash dividends declared per share on Common Stock	$	0.37		$	0.33

Three Months Ended
December 31,
2017 2016
Net sales $ 1,586.3
$ 1,211.4
Cost of sales 1,344.1
1,011.7
Gross income 242.2
199.7

Operating expenses:
Selling, general and administrative 157.8
151.0
Amortization of purchased intangibles 10.6
12.5
Total operating expenses 168.4
163.5
Operating income 73.8
36.2

Other income (expense):
Interest expense (15.4 ) (14.7 )
Interest income 1.7
0.8
Miscellaneous, net 0.5
1.3
Income before income taxes and equity in earnings of unconsolidated affiliates 60.6
23.6
Provision for income taxes 4.7
5.2
Income before equity in earnings of unconsolidated affiliates 55.9
18.4
Equity in earnings of unconsolidated affiliates 0.5
0.8
Net income $ 56.4
$ 19.2

Earnings per share attributable to common shareholders:

Basic $ 0.75
$ 0.26
Diluted 0.74
0.26

Cash dividends declared per share on Common Stock $ 0.24
$ 0.21

The accompanying notes are an integral part of these financial statements

Table of Contents

OSHKOSH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(InDollars in millions; unaudited)

	Three Months Ended March 31,
	2022			2021
Net income (loss)	$	(2.1	)	$	99.6
Other comprehensive income (loss), net of tax:
Employee pension and postretirement benefits		0.4			1.2
Currency translation adjustments		(6.5	)		(20.0	)
Change in fair value of derivative instruments		0.8			0.4
Total other comprehensive income (loss), net of tax		(5.3	)		(18.4	)
Comprehensive income (loss)	$	(7.4	)	$	81.2

Three Months Ended
December 31,
2017 2016
Net income $ 56.4
$ 19.2
Other comprehensive income (loss), net of tax:
Employee pension and postretirement benefits 0.5
0.8
Currency translation adjustments 2.1
(30.4 )
Total other comprehensive income (loss), net of tax 2.6
(29.6 )
Comprehensive income (loss) $ 59.0
$ (10.4 )

The accompanying notes are an integral part of these financial statements

Table of Contents

OSHKOSH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(InDollars in millions, except share and per share amounts; unaudited)

	March 31, 2022			December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	944.5		$	995.7
Receivables, net		987.4			973.4
Unbilled receivables, net		514.3			440.8
Inventories, net		1,527.9			1,382.7
Income taxes receivable		255.2			250.3
Other current assets		64.5			71.7
Total current assets		4,293.8			4,114.6
Property, plant and equipment, net		603.7			593.2
Goodwill		1,044.9			1,049.0
Purchased intangible assets, net		464.9			464.0
Deferred income taxes		130.9			111.5
Other long-term assets		436.3			389.5
Total assets	$	6,974.5		$	6,721.8

Liabilities and Shareholders’ Equity
Current liabilities:
Revolving credit facilities	$	—		$	—
Accounts payable		982.3			747.4
Customer advances		755.6			690.9
Payroll-related obligations		138.5			118.4
Income taxes payable		221.1			222.1
Other current liabilities		348.8			364.2
Total current liabilities		2,446.3			2,143.0
Long-term debt, less current maturities		594.4			819.0
Long-term customer advances		455.2			207.0
Other long-term liabilities		510.6			476.4
Commitments and contingencies
Shareholders’ equity:
Preferred Stock ($0.01 par value; 2,000,000 shares authorized; 0ne issued and outstanding)		—			—
Common Stock ($0.01 par value; 300,000,000 shares authorized; 75,101,465 shares issued)		0.7			0.7
Additional paid-in capital		798.2			792.4
Retained earnings		3,084.0			3,110.6
Accumulated other comprehensive loss		(133.9	)		(128.6	)
Common Stock in treasury, at cost (9,001,160 and 8,289,347 shares, respectively)		(781.0	)		(698.7	)
Total shareholders’ equity		2,968.0			3,076.4
Total liabilities and shareholders’ equity	$	6,974.5		$	6,721.8

December 31, September 30,
2017 2017
Assets
Current assets:
Cash and cash equivalents $ 379.1
$ 447.0
Receivables, net 1,229.4
1,306.3
Inventories, net 1,219.9
1,198.4
Other current assets 88.2
88.1
Total current assets 2,916.6
3,039.8
Property, plant and equipment, net 458.0
469.9
Goodwill 1,015.8
1,013.0
Purchased intangible assets, net 497.3
507.8
Other long-term assets 74.4
68.4
Total assets $ 4,962.1
$ 5,098.9

Liabilities and Shareholders' Equity
Current liabilities:
Revolving credit facilities and current maturities of long-term debt $ 29.7
$ 23.0
Accounts payable 554.8
651.0
Customer advances 551.3
513.4
Payroll-related obligations 129.6
191.8
Other current liabilities 300.0
303.9
Total current liabilities 1,565.4
1,683.1
Long-term debt, less current maturities 803.4
807.9
Other long-term liabilities 299.9
300.5
Commitments and contingencies

Shareholders' equity:
Preferred Stock ($.01 par value; 2,000,000 shares authorized; none issued and outstanding) —
—
Common Stock ($.01 par value; 300,000,000 shares authorized; 92,101,465 shares issued) 0.9
0.9
Additional paid-in capital 799.3
802.2
Retained earnings 2,438.2
2,399.8
Accumulated other comprehensive loss (122.4 ) (125.0 )
Common Stock in treasury, at cost (17,477,614 and 17,088,224 shares, respectively) (822.6 ) (770.5 )
Total shareholders’ equity 2,293.4
2,307.4
Total liabilities and shareholders' equity $ 4,962.1
$ 5,098.9

The accompanying notes are an integral part of these financial statements

Table of Contents

OSHKOSH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF ~~SHAREHOLDERS'~~ SHAREHOLDERS’ EQUITY

(InDollars in millions, except per share amounts; unaudited)

	Three Months Ended March 31, 2022
	Common Stock		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock in Treasury at Cost			Total
Balance at December 31, 2021	$	0.7	$	792.4		$	3,110.6		$	(128.6	)	$	(698.7	)	$	3,076.4
Net loss		—		—			(2.1	)		—			—			(2.1	)
Employee pension and postretirement benefits, net of tax of $0.1		—		—			—			0.4			—			0.4
Currency translation adjustments		—		—			—			(6.5	)		—			(6.5	)
Cash dividends ($0.37 per share)		—		—			(24.5	)		—			—			(24.5	)
Repurchases of Common Stock		—		—			—			—			(85.0	)		(85.0	)
Exercise of stock options		—		(0.2	)		—			—			2.1			1.9
Stock-based compensation expense		—		6.8			—			—			—			6.8
Payment of stock-based restricted and performance shares		—		(0.5	)		—			—			0.5			—
Shares tendered for taxes on stock-based compensation		—		—			—			—			(0.4	)		(0.4	)
Other		—		(0.3	)		—			0.8			0.5			1.0
Balance at March 31, 2022	$	0.7	$	798.2		$	3,084.0		$	(133.9	)	$	(781.0	)	$	2,968.0

	Three Months Ended March 31, 2021
	Common Stock		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock in Treasury at Cost			Total
Balance at December 31, 2020	$	0.7	$	791.4		$	2,793.5		$	(165.5	)	$	(487.5	)	$	2,932.6
Net income		—		—			99.6			—			—			99.6
Employee pension and postretirement benefits, net of tax of $0.2		—		—			—			1.2			—			1.2
Currency translation adjustments		—		—			—			(20.0	)		—			(20.0	)
Cash dividends ($0.33 per share)		—		—			(22.7	)		—			—			(22.7	)
Exercise of stock options		—		(0.6	)		—			—			18.8			18.2
Stock-based compensation expense		—		8.3			—			—			—			8.3
Payment of stock-based restricted and performance shares		—		(0.8	)		—			—			0.8			—
Other		—		—			0.6			0.4			—			1.0
Balance at March 31, 2021	$	0.7	$	798.3		$	2,871.0		$	(183.9	)	$	(467.9	)	$	3,018.2

Common
Stock

Additional
Paid-In
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Common
Stock in
Treasury,
at Cost
Total
Balance at September 30, 2016 $ 0.9
$ 782.3
$ 2,177.0
$ (175.0 ) $ (808.7 ) $ 1,976.5
Net income —
—
19.2
—
—
19.2
Employee pension and postretirement benefits,
net of tax of $0.5 —
—
—
0.8
—
0.8
Currency translation adjustments —
—
—
(30.4 ) —
(30.4 )
Cash dividends ($0.21 per share) —
—
(15.6 ) —
—
(15.6 )
Exercise of stock options —
5.7
—
—
20.5
26.2
Stock-based compensation expense —
6.5
—
—
—
6.5
Payment of earned performance shares —
(1.3 ) —
—
1.3
—
Shares tendered for taxes on stock-based compensation —
—
—
—
(3.0 ) (3.0 )
Other —
(3.1 ) —
—
3.2
0.1
Balance at December 31, 2016 $ 0.9
$ 790.1
$ 2,180.6
$ (204.6 ) $ (786.7 ) $ 1,980.3

Common
Stock

Additional
Paid-In
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Common
Stock in
Treasury,
at Cost
Total
Balance at September 30, 2017 $ 0.9
$ 802.2
$ 2,399.8
$ (125.0 ) $ (770.5 ) $ 2,307.4
Net income —
—
56.4
—
—
56.4
Employee pension and postretirement benefits,
net of tax of $0.2
—
—
—
0.5
—
0.5
Currency translation adjustments —
—
—
2.1
—
2.1
Cash dividends ($0.24 per share) —
—
(18.0 ) —
—
(18.0 )
Repurchases of Common Stock —
—
—
—
(63.7 ) (63.7 )
Exercise of stock options —
(1.8 ) —
—
10.4
8.6
Stock-based compensation expense —
7.5
—
—
—
7.5
Payment of earned performance shares —
(2.7 ) —
—
2.7
—
Shares tendered for taxes on stock-based compensation —
—
—
—
(7.4 ) (7.4 )
Other —
(5.9 ) —
—
5.9
—
Balance at December 31, 2017 $ 0.9

$ 799.3

$ 2,438.2

$ (122.4 )
$ (822.6 )
$ 2,293.4

The accompanying notes are an integral part of these financial statements

Table of Contents

OSHKOSH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(InDollars in millions; unaudited)

	Three Months Ended March 31,
	2022			2021
Operating activities:
Net income (loss)	$	(2.1	)	$	99.6
Depreciation and amortization		26.4			21.7
Stock-based compensation expense		6.8			8.3
Deferred income taxes		1.0			3.8
Gain on sale of assets		(1.0	)		(2.1	)
Foreign currency transaction gains		(1.5	)		(1.2	)
Other non-cash adjustments		(0.6	)		(0.2	)
Changes in operating assets and liabilities		299.9			196.9
Net cash provided by operating activities		328.9			326.8

Investing activities:
Additions to property, plant and equipment		(26.1	)		(16.7	)
Additions to equipment held for rental		(1.9	)		(2.2	)
Acquisition of business, net of cash acquired		—			(112.1	)
Proceeds from sale of equipment held for rental		3.2			5.1
Other investing activities		(15.3	)		3.6
Net cash used by investing activities		(40.1	)		(122.3	)

Financing activities:
Repayments of debt (original maturities greater than three months)		(225.0	)		—
Debt issuance costs		(2.5	)		—
Repurchases of Common Stock		(85.4	)		—
Dividends paid		(24.5	)		(22.7	)
Proceeds from exercise of stock options		1.9			18.2
Other financing activities		(2.4	)		(1.2	)
Net cash used by financing activities		(337.9	)		(5.7	)
Effect of exchange rate changes on cash		(2.1	)		(4.2	)
Increase (decrease) in cash and cash equivalents		(51.2	)		194.6
Cash and cash equivalents at beginning of period		995.7			898.6
Cash and cash equivalents at end of period	$	944.5		$	1,093.2

Supplemental disclosures:
Cash paid for interest	$	10.1		$	11.6
Cash paid for income taxes		5.3			83.9
Proceeds from income tax refunds		0.3			—
Cash paid for operating lease liabilities		11.5			13.8
Operating right-of-use assets obtained		2.8			7.9

Three Months Ended
December 31,
2017 2016
Operating activities:

Net income $ 56.4
$ 19.2
Depreciation and amortization 31.4
32.1
Stock-based compensation expense 7.5
6.5
Deferred income taxes (27.8 ) 8.4
Gain on sale of assets (0.6 ) (0.3 )
Foreign currency transaction (gains) losses (0.8 ) 0.4
Other non-cash adjustments 0.9
0.8
Changes in operating assets and liabilities (37.8 ) 16.7
Net cash provided by operating activities 29.2
83.8

Investing activities:
Additions to property, plant and equipment (18.7 ) (14.2 )
Additions to equipment held for rental (1.2 ) (12.9 )
Proceeds from sale of equipment held for rental 2.5
5.3
Other investing activities (0.8 ) (0.2 )
Net cash used by investing activities (18.2 ) (22.0 )

Financing activities:

Proceeds from issuance of debt (original maturities greater than three months) 6.5
—
Repayments of debt (original maturities greater than three months) (5.0 ) (20.0 )
Repurchases of Common Stock (71.1 ) (3.0 )
Dividends paid (18.0 ) (15.6 )
Proceeds from exercise of stock options 8.6
26.2
Net cash used by financing activities (79.0 ) (12.4 )

Effect of exchange rate changes on cash 0.1
(1.7 )
Increase (decrease) in cash and cash equivalents (67.9 )
47.7
Cash and cash equivalents at beginning of period 447.0
321.9
Cash and cash equivalents at end of period $ 379.1
$ 369.6

Supplemental disclosures:
Cash paid for interest $ 6.8
$ 6.6
Cash paid for income taxes 0.8
22.5

The accompanying notes are an integral part of these financial statements

Table of Contents

OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.	Basis of Presentation

~~(Unaudited)~~

~~1. Basis of Presentation~~

In October 2021, Oshkosh Corporation and its subsidiaries (the Company) changed its fiscal year from a year beginning on October 1 and ending September 30 to a year beginning on January 1 and ending December 31. The Company’s current fiscal year runs from January 1, 2022 through December 31, 2022 (fiscal 2022).

In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments (which include normal recurring adjustments, unless otherwise noted) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. These Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K of Oshkosh Corporation for the year ended September 30, ~~2017. The interim results~~2021. Results for the three months ended March 31, 2022 are not necessarily indicative of results for any other interim period or for fiscal 2022. Certain reclassifications have been made to the ~~full year. “Oshkosh” refers~~prior period financial statements to ~~Oshkosh Corporation not including its subsidiaries~~conform to the presentation as of and ~~“the Company” refers to Oshkosh Corporation and its subsidiaries.~~

~~2. New Accounting Standards~~

~~In May 2014,~~for the ~~Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606), and~~three months ended March 31, 2022.

2.	Revenue Recognition

The Defense segment utilizes the ~~FASB has since issued several amendments to this standard, which clarifies the principles for recognizing revenue. This guidance requires an entity~~cost-to-cost method of percentage-of-completion to recognize revenue ~~to depict~~on its performance obligations that are satisfied over time because it best depicts the transfer of ~~promised goods or services~~control to ~~customers in an amount that reflects~~ the ~~consideration~~customer. Under the cost-to-cost method of percentage-of-completion, the Defense segment measures progress based on the ratio of costs incurred to ~~which~~date to total estimated costs for the entity expects to be entitled in exchange for those goods or services. The standard supersedes all existing U.S. GAAP guidance on revenue recognition and is expected to require the use of more judgment and result in additional disclosures. The new standard is effective for annual reporting periods beginning after December 15, 2017. Early adoption is permitted.performance obligation. The Company ~~plans to adopt~~recognizes changes in estimated sales or costs and the ~~standard~~resulting profit or loss on October 1, 2018. The Company has elected to adopt the new revenue recognition standard following the modified retrospective approach, as permitted by the standard. This approach will result in an adjustment to retained earnings fora cumulative basis. Contract adjustments represent the cumulative effect of ~~initially applying~~ the changes on prior periods. If a loss is expected on a performance obligation, the complete estimated loss is recorded in the period in which the loss is identified.

There is significant judgment involved in estimating sales and costs within the Defense segment. Each contract is evaluated at contract inception to identify risks and estimate revenue and costs. In performing this evaluation, the Defense segment considers risks of contract performance such as technical requirements, schedule, duration and key contract dependencies. These considerations are then factored into the Company’s estimated revenue and costs. Preliminary contract estimates are subject to change throughout the duration of the contract as additional information becomes available that impacts risks and estimated revenue and costs. In addition, as contract modifications (e.g., new ~~standard on its adoption date.~~orders) are received, the additional units are factored into the overall contract estimate of costs and transaction price. Contract adjustments impacted the Company’s results as follows (in millions, except for per share amounts):

	Three Months Ended March 31,
	2022			2021
Net sales	$	(7.9	)	$	(3.1	)
Operating income		(10.6	)		(3.6	)
Net income		(8.1	)		(2.8	)
Diluted earnings per share	$	(0.12	)	$	(0.04	)

Table of Contents

Disaggregation of Revenue

Consolidated net sales disaggregated by segment and timing of revenue recognition are as follows (in millions):

	Three Months Ended March 31, 2022
	Access Equipment		Defense		Fire & Emergency		Commercial		Corporate and Intersegment Eliminations			Total
Point in time	$	869.9	$	2.1	$	282.6	$	154.3	$	(2.3	)	$	1,306.6
Over time		13.2		533.5		5.3		87.1		—			639.1
	$	883.1	$	535.6	$	287.9	$	241.4	$	(2.3	)	$	1,945.7

	Three Months Ended March 31, 2021
	Access Equipment		Defense		Fire & Emergency		Commercial		Corporate and Intersegment Eliminations			Total
Point in time	$	721.1	$	10.3	$	307.6	$	126.5	$	(7.0	)	$	1,158.5
Over time		17.1		604.4		4.9		103.5		0.6			730.5
	$	738.2	$	614.7	$	312.5	$	230.0	$	(6.4	)	$	1,889.0

See Note 18 of the Notes to Condensed Consolidated Financial Statements for further disaggregated sales information.

Contract Assets and Contract Liabilities

The Company ~~has assembled a cross-functional team with representation from all segments that~~ is ~~dedicated~~generally entitled to bill its customers upon satisfaction of its performance obligations, except for its long-term contracts in the ~~implementation of this new accounting standard. The team, with the support of a project management office, is focused on executing a multi-phase plan that will culminate with the adoption~~Defense segment which typically allow for billing upon acceptance of the ~~standard.~~ finished goods, payments received from customers in advance of performance and extended warranties that are billed in advance of the warranty coverage period. Customer payment is usually received shortly after billing and payment terms generally do not exceed one year. See Note 7 of the Notes to Condensed Consolidated Financial Statements for additional information on the Company’s receivables balances.

With the exception of the Fire & Emergency segment, the Company’s contracts typically do not contain a significant financing component. In the Fire & Emergency segment, customers earn interest on customer advances at a rate determined in a separate financing transaction between the Fire & Emergency segment and the customer at contract inception. Interest charges of $5.0 million and $4.5 million were recorded in “Interest expense” in the Condensed Consolidated Statements of Income for the three months ended March 31, 2022 and 2021, respectively, for amounts attributable to customer advances.

The ~~cross-functional team focused~~timing of billing does not always match the timing of revenue recognition. In instances where a customer pays consideration in advance or when the Company is entitled to bill a customer in advance of recognizing the related revenue, the Company records a contract liability. The Company reduces contract liabilities when the Company transfers control of the promised goods and services. Contract liabilities consisted of the following (in millions):

	March 31,		December 31,
	2022		2021
Customer advances	$	755.6	$	690.9
Other current liabilities		74.8		81.9
Long-term customer advances		455.2		207.0
Other long-term liabilities		58.6		54.9
Total contract liabilities	$	1,344.2	$	1,034.7

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Three Months Ended

March 31,

2022

2021

Beginning liabilities recognized in revenue

118.3

129.8

In instances where the Company recognizes revenue prior to having an unconditional right to payment, the Company records a contract asset. The Company reduces contract assets when the Company has an unconditional right to payment. The Company periodically assesses its contract assets for impairment. Contract assets and liabilities are determined on ~~concluding and documenting key accounting positions~~a net basis for each contract. The Company did 0t record any impairment losses on contract assets during the three months ended ~~December~~March 31, ~~2017.~~ 2022 or 2021.

The ~~Company's Audit Committee~~Defense segment recognizes an asset for costs incurred to fulfill an existing contract or highly-probable anticipated contract if such costs generate or enhance resources that will be used in satisfying performance obligations in the future and the costs are expected to be recovered. Under the Next Generation Delivery Vehicles (NGDV) contract with the United States Postal Service (USPS), the Company has ~~been receiving regular briefings on~~determined that it does not transfer control of any goods or services to the ~~implementation team's progress and potential implications~~USPS until the construction of the production vehicles. Costs required to fulfill the NGDV production contract incurred prior to production of the vehicles are capitalized to the extent that they generate or enhance resources used in the production of NGDVs. These costs will be amortized over the anticipated production volume of the NGDV contact. Deferred contract costs are included in “Other long-term assets” within the Company’s Condensed Consolidated Balance Sheets. Deferred contract costs, the majority of which related to ~~adoption~~the NGDV contract, consisted of the ~~new standard.~~ following (in millions):

	March 31,		December 31,
	2022		2021
Costs for anticipated contracts	$	5.3	$	4.9
Engineering costs		93.6		60.0
Factory setup costs		6.3		4.1
Supplier-owned tooling		20.3		4.2
Deferred contract related costs	$	125.5	$	73.2

The ~~internal control and process changes necessary~~Company offers a variety of service-type warranties, including optionally priced extended warranty programs. Outstanding balances related to ~~comply with~~service-type warranties are included within contract liabilities. Revenue related to service-type warranties is deferred until after the ~~requirements of the new standard as well as its financial impact remain under evaluation.~~

~~In July 2015, the FASB issued ASU 2015-11,~~ ~~Inventory (Topic 330), Simplifying the Measurement of Inventory. ASU 2015-11 is part of the FASB’s initiative to simplify accounting standards. The guidance requires an entity to recognize inventory within the scope~~expiration of the standard atwarranty period. The revenue is then recognized in income over the ~~lower~~term of ~~cost or net realizable value. Net realizable value is~~ the ~~estimated selling price~~extended warranty period in proportion to the costs that are expected to be incurred. Changes in the ~~ordinary course~~Company’s service-type warranties were as follows (in millions):

	Three Months Ended March 31,
	2022			2021
Balance at beginning of period	$	66.9		$	63.0
Deferred revenue for new service warranties		7.2			6.5
Amortization of deferred revenue		(4.8	)		(6.4	)
Foreign currency translation		(0.2	)		(0.2	)
Balance at end of period	$	69.1		$	62.9

Classification of business, less reasonably predictable costs of completion, disposal and transportation. The Company adopted ASU 2015-11 on October 1, 2017. The adoption of ASU 2015-11 did not have a material impact on the Company's consolidated financial statements.

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases (Topic 842),~~ ~~which requires lessees to reflect most leases on their balance sheet as lease liabilities with a corresponding right-of-use asset, while leaving presentation of lease expense~~service-type warranties in the ~~statement~~Condensed Consolidated Balance Sheets consisted of ~~income largely unchanged. The standard also eliminates~~ the real-estate specific provisions that exist under current U.S. GAAP and modifies the classification criteria and accounting lessors must apply to sales-type and direct financing leases. The Company will be required to adopt ASU 2016-02 as of October 1, 2019. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-02 on the Company's consolidated financial statements.following (in millions):

	March 31,		December 31,
	2022		2021
Other current liabilities	$	22.9	$	22.3
Other long-term liabilities		46.2		44.6
	$	69.1	$	66.9

Table of Contents

Remaining Performance Obligations

As of March 31, 2022, the Company had unsatisfied performance obligations for contracts with an original duration greater than one year totaling $9.15 billion, of which $3.08 billion is expected to be satisfied and revenue recognized in the remaining nine months of fiscal 2022, $2.36 billion is expected to be recognized in fiscal 2023 and $3.70 billion is expected to be satisfied and revenue recognized beyond fiscal 2023.

3.	Stock-Based Compensation

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

In ~~June 2016,~~February 2017, the ~~FASB issued ASU 2016-13,~~ ~~Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments~~Company’s shareholders approved the 2017 Incentive Stock and Awards Plan (the “2017 Stock Plan”). The ~~standard requires a change in~~2017 Stock Plan replaced the ~~measurement approach~~2009 Incentive Stock and Awards Plan (as amended, the “2009 Stock Plan”). While no new awards will be granted under the 2009 Stock Plan, awards previously made under that plan that were outstanding as of the approval date of the 2017 Stock Plan will remain outstanding and continue to be governed by the provisions of that plan. At March 31, 2022, the Company had reserved 3,607,006 shares of Common Stock available for ~~credit losses on financial assets measured on~~issuance to provide for the exercise of outstanding stock options and the issuance of Common Stock under incentive compensation awards, including awards issued prior to the effective date of the 2017 Stock Plan.

The Company recognizes stock-based compensation expense over the requisite service period for vesting of an ~~amortized cost basis from an incurred loss method~~award, or to an ~~expected loss method, thereby eliminating~~employee’s eligible retirement date, if earlier and applicable. Total stock-based compensation expense, including cash-based liability awards, for the ~~requirement that a credit loss be considered probable to impact~~three months ended March 31, 2022 was $6.5 million ($5.5 million net of tax). Total stock-based compensation expense, including cash-based liability awards, for the ~~valuation~~three months ended March 31, 2021 was $9.9 million ($8.3 million net of a financial asset measured on an amortized cost basis. The standard requires the measurement of expected credit losses to be based on relevant information about past events, including historical experience, current conditions, and a reasonable and supportable forecast that affects the collectibility of the related financial asset. The Company will be required to adopt ASU 2016-13 as of October 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-13 on the Company's consolidated financial statements.tax).

4.	Employee Benefit Plans

~~In October 2016, the FASB issued ASU 2016-16,~~ ~~Income Taxes (Topic 740), Intra-Entity Transfers of Assets Other Than Inventory~~. The standard requires that an entity recognize the income tax consequences of an intra-entity transfer of an asset when the transfer occurs as opposed to when the asset is transferred to an outside party as required under current U.S. GAAP. The standard does not apply to intra-entity transfers of inventory, which will continue to follow current U.S. GAAP. The Company will be required to adopt ASU 2016-16 as of October 1, 2018. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2016-16 on the Company's consolidated financial statements.

~~In January 2017, the FASB issued ASU 2017-04,~~ ~~Intangibles - Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment.~~ The standard simplifies the measurement of goodwill impairment by eliminating the requirement that an entity compute the implied fair value of goodwill based on the fair values of its assets and liabilities to measure impairment. Instead, goodwill impairment will be measured as the difference between the fair value of the reporting unit and the carrying value of the reporting unit. The standard also clarifies the treatment of the income tax effect of tax deductible goodwill when measuring goodwill impairment loss. The Company will be required to adopt ASU 2017-04 as of October 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2017-04 on the Company's consolidated financial statements.

~~In March 2017, the FASB issued ASU 2017-07,~~ ~~Compensation - Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.~~ ~~The standard requires that an entity report the service cost component~~

Components of net periodic pension ~~and postretirement~~benefit cost ~~in the same line item or items~~were as other compensation costs arising from services rendered by the pertinent employees during the period. The remaining components of net benefit costs are required to be presented in the income statement separately from the service component and outside a subtotal of income from operations, if one is presented. The amendment further allows only the service cost componentfollows (in millions):

	Three Months Ended March 31,
	2022			2021
Components of net periodic benefit cost
Service cost	$	2.6		$	2.9
Interest cost		4.3			4.1
Expected return on plan assets		(5.2	)		(5.0	)
Amortization of prior service cost (benefit)		0.5			0.5
Amortization of net actuarial loss (gain)		0.2			1.2
Expenses paid		0.8			0.8
Net periodic benefit cost	$	3.2		$	4.5

Components of net periodic ~~pension~~other post-employment benefit cost were as follows (in millions):

	Three Months Ended March 31,
	2022			2021
Components of net periodic benefit cost
Service cost	$	0.6		$	0.5
Interest cost		0.3			0.3
Amortization of prior service cost (benefit)		(0.3	)		(0.3	)
Amortization of net actuarial loss (gain)		0.1			—
Net periodic benefit cost	$	0.7		$	0.5

Components of net periodic benefit cost other than “Service cost” and postretirement costs to be eligible for capitalization, when applicable. The Company will be required to adopt ASU 2017-07 as of October 1, 2018. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2017-07 on the Company's consolidated financial statements.

~~In August 2017, the FASB issued ASU 2017-12,~~ ~~Derivatives and Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities~~. The standard more closely aligns hedge accounting with risk management strategies, simplifies the application of hedge accounting, and increases transparency as to the scope and results of hedging programs. The amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item“Expenses paid” are included in “Miscellaneous, net” in the ~~financial statements. The Company adopted ASU 2017-12 on October 1, 2017. The adoption~~Condensed Consolidated Statements of ~~ASU 2017-12 did not have a material impact on the Company's consolidated financial statements.~~

Income.

Table of Contents

5.	Income Taxes

The Company recorded income tax expense of $20.2 million, or 107.4% of pre-tax income, for the three months ended March 31, 2022, compared to $33.2 million, or 25.0% of pre-tax income, for the three months ended March 31, 2021. Results for the three months ended March 31, 2022 were unfavorably impacted by $15.4 million of net discrete charges, including a charge of $18.1 million related to taxes on income generated in prior periods as the Company revised its interpretation of certain foreign anti-hybrid tax legislation based upon recent comments from the corresponding taxing authorities and a benefit of $3.8 million for the release of a foreign tax credit valuation allowance in response to the issuance by the U.S. Treasury Department of final foreign tax credit regulations. Results for the three months ended March 31, 2021 were unfavorably impacted by $1.4 million of net discrete charges, including a $0.8 million charge related to state audit settlements.

The Company’s liability for gross unrecognized tax benefits, excluding related interest and penalties, was $82.2 million and $41.5 million as of March 31, 2022 and December 31, 2021, respectively. Included in the Company’s March 31, 2022 liability for gross unrecognized tax benefits is an $18.7 million reserve related to certain foreign anti-hybrid legislation and a $22.3 million U.S. federal reserve for a temporary deferred position. As of March 31, 2022, net unrecognized tax benefits, excluding interest and penalties, of $43.2 million would affect the Company’s net income if recognized.

The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits in the “Provision for income taxes” in the Condensed Consolidated Statements of Income. During the three months ended March 31, 2022 and 2021, the Company recognized expense of $0.6 million and $0.5 million, respectively, related to interest and penalties. At March 31, 2022, the Company had accruals for the payment of interest and penalties of $4.0 million. During the next twelve months, it is reasonably possible that federal, state and foreign tax audit resolutions could reduce net unrecognized tax benefits by approximately $2.3 million because the Company’s tax positions are sustained on audit, the Company agrees to their disallowance or the statutes of limitations close.

~~OSHKOSH CORPORATION~~

6.	Earnings Per Share

The reconciliation of basic weighted-average shares outstanding to diluted weighted-average shares outstanding was as follows:

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

	Three Months Ended March 31,
	2022		2021
Basic weighted-average common shares outstanding		66,394,041		68,513,419
Dilutive stock options and other equity-based compensation awards		—		775,202
Diluted weighted-average common shares outstanding		66,394,041		69,288,621

Shares for stock-based compensation not included in the computation of diluted earnings per share attributable to common shareholders because they would have been anti-dilutive were as follows:

~~(Unaudited)~~

Three Months Ended

March 31,

2022

2021

Shares for stock-based compensation

522,003

—

Table of Contents

7.	Receivables

~~3. Receivables~~

Receivables consisted of the following (in millions):

	March 31, 2022			December 31, 2021
Trade receivables - U.S. government	$	102.4		$	140.7
Trade receivables - other		848.7			797.5
Finance receivables		7.5			8.0
Other receivables		43.2			40.0
		1,001.8			986.2
Less allowance for doubtful accounts		(5.9	)		(4.2	)
	$	995.9		$	982.0

December 31, September 30,
2017 2017
U.S. government:
Amounts billed $ 64.3
$ 137.8
Costs and profits not billed 233.4
137.9
297.7
275.7
Other trade receivables 890.7
985.4
Finance receivables 13.9
5.8
Notes receivable 24.8
34.2
Other receivables 43.0
46.3
1,270.1
1,347.4
Less allowance for doubtful accounts (14.5 ) (18.3 )
$ 1,255.6
$ 1,329.1

Classification of receivables in the Condensed Consolidated Balance Sheets consisted of the following (in millions):

	March 31, 2022		December 31, 2021
Current receivables	$	987.4	$	973.4
Long-term receivables		8.5		8.6
	$	995.9	$	982.0

December 31, September 30,
2017 2017
Current receivables $ 1,229.4
$ 1,306.3
Long-term receivables (included in “Other long-term assets”) 26.2
22.8
$ 1,255.6
$ 1,329.1

~~Finance and notes receivable aging and accrual status consisted of the following (in millions):~~

Finance Receivables Notes Receivable
December 31, 2017 September 30, 2017 December 31, 2017 September 30, 2017
Aging of receivables that are past due:
Greater than 30 days and less than 60 days $ —
$ —
$ —
$ —
Greater than 60 days and less than 90 days —
—
—
—
Greater than 90 days 2.1
2.1
0.2
0.2

Receivables on nonaccrual status 3.6
3.7
20.1
21.3
Receivables past due 90 days or more and still accruing —
—
—
—

Receivables subject to general reserves 1.8
2.1
—
—
Allowance for doubtful accounts (0.1 ) —
—
—
Receivables subject to specific reserves 12.1
3.7
24.8
34.2
Allowance for doubtful accounts (1.4 ) (1.5 ) (6.1 ) (10.0 )

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Finance Receivables:~~ Finance receivables represent sales-type leases resulting from the sale of the Company's products and the purchase of finance receivables from lenders pursuant to customer defaults under program agreements with finance companies. Finance receivables originated by the Company generally include a residual value component. Residual values are determined based on the expectation that the underlying equipment will have a minimum fair market value at the end of the lease term. This residual value accrues to the Company at the end of the lease. The Company uses its experience and knowledge as an original equipment manufacturer and participant in end markets for the related products along with third-party studies to estimate residual values. The Company monitors these values for impairment on a periodic basis and reflects any resulting reductions in value in current earnings.

Delinquency is the primary indicator of credit quality of finance receivables. The Company maintains a general allowance for finance receivables considered doubtful of future collection based upon historical experience. Additional allowances are established based upon the Company’s perception of the quality of the finance receivables, including the length of time the receivables are past due, past experience of collectibility and underlying economic conditions. In circumstances where the Company believes collectibility is no longer reasonably assured, a specific allowance is recorded to reduce the net recognized receivable to the amount reasonably expected to be collected. Finance receivables are written off if management determines that the specific borrower does not have the ability to repay the loan amounts due in full. The terms of the finance agreements generally give the Company the ability to take possession of the underlying collateral. The Company may incur losses in excess of recorded allowances if the financial condition of its customers were to deteriorate or the full amount of any anticipated proceeds from the sale of the collateral supporting its customers’ financial obligations is not realized.

~~Notes Receivable:~~ Notes receivable include amounts related to refinancing of trade accounts and finance receivables. As of December 31, 2017, approximately 70% of the notes receivable balance outstanding was due from two parties. The Company routinely evaluates the creditworthiness of its customers and establishes reserves where the Company believes collectibility is no longer reasonably assured. Certain notes receivable are collateralized by a security interest in the underlying assets and/or other assets owned by the debtor. The Company may incur losses in excess of recorded allowances if the financial condition of its customers were to deteriorate or the full amount of any anticipated proceeds from the sale of the collateral supporting its customers' financial obligations is not realized.

~~Quality of Finance and Notes Receivable:~~ The Company does not accrue interest income on finance and notes receivable in circumstances where the Company believes collectibility is no longer reasonably assured. Any cash payments received on nonaccrual finance and notes receivable are applied first to the principal balances. The Company does not resume accrual of interest income until the customer has shown that it is capable of meeting its financial obligations by making timely payments over a sustained period of time. The Company determines past due or delinquency status based upon the due date of the receivable.

Receivables subject to specific reserves also include loans that the Company has modified in troubled debt restructurings as a concession to customers experiencing financial difficulty. To minimize the economic loss, the Company may modify certain finance and notes receivable. Modifications generally consist of restructured payment terms and time frames in which no payments are required. At December 31, 2017, restructured finance and notes receivables were $3.0 million and $6.1 million, respectively. Losses on troubled debt restructurings were not significant during the three months ended December 31, 2017 and 2016.

Changes in the Company’s allowance for doubtful accounts by type of receivable were as follows (in millions):

	Three Months Ended March 31, 2022							Three Months Ended March 31, 2021
	Finance Receivables			Trade and Other Receivables		Total		Finance Receivables			Trade and Other Receivables		Total
Allowance at beginning of period	$	0.5		$	3.7	$	4.2	$	1.4		$	4.4	$	5.8
Provision for doubtful accounts, net of recoveries		(0.1	)		1.8		1.7		(0.3	)		0.2		(0.1	)
Allowance at end of period	$	0.4		$	5.5	$	5.9	$	1.1		$	4.6	$	5.7

8.	Inventories

Three Months Ended December 31, 2017 Three Months Ended December 31, 2016
Finance Notes Trade and Other Total Finance Notes Trade and Other Total
Allowance for doubtful accounts at beginning of period $ 1.5
$ 10.0
$ 6.8
$ 18.3
$ 1.0
$ 13.0
$ 7.2
$ 21.2
Provision for doubtful accounts, net of recoveries —
(4.0 ) 0.2
(3.8 ) 1.1
(0.6 ) (0.5 ) —
Charge-off of accounts —
—
(0.1 ) (0.1 ) —
(0.1 ) (0.2 ) (0.3 )
Foreign currency translation —
0.1
—
0.1
—
(0.7 ) —
(0.7 )
Allowance for doubtful accounts at end of period $ 1.5
$ 6.1
$ 6.9
$ 14.5
$ 2.1
$ 11.6
$ 6.5
$ 20.2

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~4. Inventories~~

Inventories consisted of the following (in millions):

	March 31, 2022			December 31, 2021
Raw materials	$	1,021.0		$	984.4
Partially finished products		426.5			334.0
Finished products		254.2			239.7
Inventories at FIFO cost		1,701.7			1,558.1
Less: Excess of FIFO cost over LIFO cost		(173.8	)		(175.4	)
	$	1,527.9		$	1,382.7

December 31, September 30,
2017 2017
Raw materials $ 606.0
$ 578.1
Partially finished products 347.3
336.6
Finished products 378.5
398.1
Inventories at FIFO cost 1,331.8
1,312.8
Less: Progress/performance-based payments on U.S. government contracts (27.6 ) (31.6 )
Excess of FIFO cost over LIFO cost (84.3 ) (82.8 )
$ 1,219.9
$ 1,198.4

~~Title to all inventories related to U.S. government contracts, which provide for progress or performance-based payments, vests with the U.S. government to the extent~~

Table of ~~unliquidated progress or performance-based payments.~~Contents

9.	Property, Plant and Equipment

~~5. Property, Plant and Equipment~~

Property, plant and equipment consisted of the following (in millions):

	March 31, 2022			December 31, 2021
Land and land improvements	$	72.7		$	72.0
Buildings		413.0			410.9
Machinery and equipment		768.1			740.9
Software and related costs		200.4			201.3
Equipment on operating lease to others		9.2			9.9
Construction in progress		45.3			45.3
		1,508.7			1,480.3
Less accumulated depreciation		(905.0	)		(887.1	)
	$	603.7		$	593.2

December 31, September 30,
2017 2017
Land and land improvements $ 58.1
$ 58.5
Buildings 298.2
298.5
Machinery and equipment 657.6
652.2
Software and related costs 151.7
149.6
Equipment on operating lease to others 28.8
30.0
1,194.4
1,188.8
Less accumulated depreciation (736.4 ) (718.9 )
$ 458.0
$ 469.9

Depreciation expense was ~~$20.1~~$20.7 million and ~~$18.9~~$20.2 million for the three months ended ~~December~~March 31, ~~2017~~2022 and ~~2016,~~2021, respectively. Capitalized interest was insignificant for all reported periods.

Equipment on operating lease to others represents the cost of equipment shipped to customers for whom the Company has guaranteed the residual value and equipment on short-term leases. These transactions are accounted for as operating leases with the related assets capitalized and depreciated over their estimated economic lives of five to ten years. Cost less accumulated depreciation for equipment on operating lease at March 31, 2022 and December 31, ~~2017 and September 30, 2017~~2021 was ~~$19.8~~$8.2 million and ~~$21.6~~$8.9 million, respectively.

10.	Goodwill and Purchased Intangible Assets

~~6. Goodwill and Purchased Intangible Assets~~

Goodwill and other indefinite-lived intangible assets are not amortized but are reviewed for impairment annually or more frequently if potential interim indicators exist that could result in impairment. The Company performs its annual impairment test in the fourth quarter of its fiscal year.

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

The following table presents changes in goodwill during the three months ended ~~December~~March 31, ~~2017~~2022 (in millions):

	Access Equipment			Defense		Fire & Emergency		Commercial		Total
Net goodwill at December 31, 2021	$	877.6		$	44.4	$	106.1	$	20.9	$	1,049.0
Foreign currency translation		(4.1	)		—		—		—		(4.1	)
Net goodwill at March 31, 2022	$	873.5		$	44.4	$	106.1	$	20.9	$	1,044.9

Access
Equipment

Fire &
Emergency
Commercial Total
Net goodwill at September 30, 2017 $ 885.9
$ 106.1
$ 21.0
$ 1,013.0
Foreign currency translation 2.9
—
(0.1 ) 2.8
Net goodwill at December 31, 2017 $ 888.8
$ 106.1
$ 20.9
$ 1,015.8

The following table presents details of the Company’s goodwill allocated to the reportable segments (in millions):

	March 31, 2022							December 31, 2021
	Gross		Accumulated Impairment			Net		Gross		Accumulated Impairment			Net
Access Equipment	$	1,805.6	$	(932.1	)	$	873.5	$	1,809.7	$	(932.1	)	$	877.6
Defense		44.4		—			44.4		44.4		—			44.4
Fire & Emergency		108.1		(2.0	)		106.1		108.1		(2.0	)		106.1
Commercial		188.5		(167.6	)		20.9		188.5		(167.6	)		20.9
	$	2,146.6	$	(1,101.7	)	$	1,044.9	$	2,150.7	$	(1,101.7	)	$	1,049.0

December 31, 2017 September 30, 2017
Gross
Accumulated
Impairment
Net Gross
Accumulated
Impairment
Net
Access equipment $ 1,820.9
$ (932.1 ) $ 888.8
$ 1,818.0
$ (932.1 ) $ 885.9
Fire & emergency 108.1
(2.0 ) 106.1
108.1
(2.0 ) 106.1
Commercial 196.8
(175.9 ) 20.9
196.9
(175.9 ) 21.0
$ 2,125.8
$ (1,110.0 ) $ 1,015.8
$ 2,123.0
$ (1,110.0 ) $ 1,013.0

Table of Contents

Details of the Company’s total purchased intangible assets are as follows (in millions):

	March 31, 2022
	Weighted- Average Life		Gross		Accumulated Amortization			Net
Amortizable intangible assets:
Distribution network		39.2	$	55.4	$	(35.9	)	$	19.5
Technology-related		12.0		108.4		(104.1	)		4.3
Customer relationships		12.6		572.6		(552.8	)		19.8
Other		12.2		23.6		(19.4	)		4.2
		14.4		760.0		(712.2	)		47.8
Non-amortizable trade names				417.1		—			417.1
			$	1,177.1	$	(712.2	)	$	464.9

	December 31, 2021
	Weighted- Average Life		Gross		Accumulated Amortization			Net
Amortizable intangible assets:
Distribution network		39.2	$	55.4	$	(35.6	)	$	19.8
Technology-related		11.9		104.7		(104.0	)		0.7
Customer relationships		12.6		572.6		(551.3	)		21.3
Other		12.1		23.6		(18.5	)		5.1
		14.4		756.3		(709.4	)		46.9
Non-amortizable trade names				417.1		—			417.1
			$	1,173.4	$	(709.4	)	$	464.0

December 31, 2017

Weighted-
Average
Life (in years)
Gross
Accumulated
Amortization
Net
Amortizable intangible assets:
Distribution network 39.1 $ 55.4
$ (29.8 ) $ 25.6
Technology-related 11.9 104.7
(101.2 ) 3.5
Customer relationships 12.8 555.0
(476.3 ) 78.7
Other 16.4 16.5
(14.8 ) 1.7
14.4 731.6
(622.1 ) 109.5
Non-amortizable trade names 387.8
—
387.8
$ 1,119.4
$ (622.1 ) $ 497.3

September 30, 2017

Weighted-
Average
Life (in years)
Gross
Accumulated
Amortization
Net
Amortizable intangible assets:
Distribution network 39.1 $ 55.4
$ (29.5 ) $ 25.9
Technology-related 11.9 104.7
(99.7 ) 5.0
Customer relationships 12.8 555.0
(467.6 ) 87.4
Other 16.3 16.4
(14.7 ) 1.7
14.4 731.5
(611.5 ) 120.0
Non-amortizable trade names 387.8
—
387.8
$ 1,119.3
$ (611.5 ) $ 507.8

On March 1, 2022, the Company acquired 2 patents with a combined value of $3.7 million. The technology-related intangible asset is subject to amortization with an estimated life of 14.3 years.

The estimated future amortization expense of purchased intangible assets for the remainder of fiscal ~~2018~~2022 and each of the five years succeeding ~~September 30, 2018~~December 31, 2021 are as follows: ~~2018~~2022 (remaining nine months) $8.5 million; 2023 - ~~$27.7~~$5.7 million; ~~2019~~2024 - ~~$36.9~~$4.5 million; ~~2020~~2025 - ~~$11.0~~$4.4 million; ~~2021~~2026 - ~~$5.3 million; 2022 - $4.9~~$4.4 million; and ~~2023~~2027 - ~~$3.5~~$4.4 million.

11.	Credit Agreements

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~7. Credit Agreements~~

The Company was obligated under the following debt instruments (in millions):

	March 31, 2022
	Principal		Debt Issuance Costs			Debt, Net
4.600% Senior notes due May 2028		300.0		(2.4	)		297.6
3.100% Senior notes due March 2030		300.0		(3.2	)		296.8
	$	600.0	$	(5.6	)	$	594.4

	December 31, 2021
	Principal		Debt Issuance Costs			Debt, Net
Senior Term Loan	$	225.0	$	(0.2	)	$	224.8
4.600% Senior notes due May 2028		300.0		(2.5	)		297.5
3.100% Senior notes due March 2030		300.0		(3.3	)		296.7
	$	825.0	$	(6.0	)	$	819.0

December 31, 2017
Principal Debt Issuance Costs Debt, Net
Senior Secured Term Loan $ 330.0
$ (0.7 ) $ 329.3
5.375% Senior Notes due March 2022 250.0
(3.3 ) 246.7
5.375% Senior Notes due March 2025 250.0
(2.6 ) 247.4
$ 830.0
$ (6.6 ) 823.4
Less current maturities (20.0 )

$ 803.4

Other short-term debt $ 9.7
Current maturities of long-term debt 20.0

$ 29.7

September 30, 2017
Principal Debt Issuance Costs Debt, Net
Senior Secured Term Loan $ 335.0
$ (0.8 ) $ 334.2
5.375% Senior Notes due March 2022 250.0
(3.5 ) 246.5
5.375% Senior Notes due March 2025 250.0
(2.8 ) 247.2
$ 835.0
$ (7.1 ) 827.9
Less current maturities (20.0 )
$ 807.9

Other short-term debt $ 3.0
Current maturities of long-term debt 20.0
$ 23.0

Table of Contents

On March ~~2014,~~23, 2022, the Company entered into ana Third Amended and Restated Credit Agreement with various lenders (the “Credit Agreement”). The Credit Agreement provides for ~~(i) a~~an unsecured revolving credit facility ~~(Revolving~~(the “Revolving Credit ~~Facility)~~Facility”) that matures in March ~~2019~~2027 with an initial maximum aggregate amount of availability of ~~$600~~$1.1 billion. Debt issuance costs of $2.5 million ~~and (ii)~~were capitalized related to the Credit Agreement. In March 2022, the Company repaid a ~~$400~~$225.0 million senior term loan ~~(Term Loan) due in quarterly principal installments~~that existed under the Second Amended and Restated Credit Agreement. As a result of ~~$5 million with a balloon payment of $310 million due at maturity in March 2019. In January 2015,~~the repayment, the Company ~~entered into an agreement with lenders under the Credit Agreement that increased the Revolving Credit Facility to an aggregate maximum amount~~expensed $0.1 million of ~~$850 million.~~ previously capitalized debt issuance costs.

At ~~December~~March 31, ~~2017,~~2022, outstanding letters of credit of ~~$94.9~~$18.6 million reduced available capacity under the Revolving Credit Facility to ~~$755.1 million.~~

The Company’s obligations under the Credit Agreement are guaranteed by certain of its domestic subsidiaries, and the Company will guarantee the obligations of certain of its subsidiaries under the Credit Agreement. Subject to certain exceptions, the Credit Agreement is collateralized by (i) a first-priority perfected lien and security interests in substantially all of the personal property of the Company, each material subsidiary of the Company and each subsidiary guarantor, (ii) mortgages upon certain real property of the Company and certain of its domestic subsidiaries and (iii) a pledge of the equity of each material subsidiary of the Company.

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

$1.08 billion.

Under the Credit Agreement, the Company ~~must~~is obligated to pay (i) an unused commitment fee ranging from ~~0.225%~~0.080% to ~~0.35%~~0.225% per annum of the average daily unused portion of the aggregate revolving credit commitments under the Credit Agreement and (ii) a fee ranging from ~~0.625%~~0.4375% to ~~2.00%~~1.500% per annum of the maximum amount available to be drawn for each letter of credit issued and outstanding under the Credit Agreement.

Borrowings under the Credit Agreement bear interest for dollar-denominated loans at a variable rate equal to (i) ~~LIBOR~~Term SOFR (the forward-looking secured overnight financing rate) plus a specified margin, which may be adjusted upward or downward depending on whether certain criteria are satisfied, or (ii) ~~for dollar-denominated loans only,~~ the base rate (which is the highest of ~~(a) the administrative agent’s~~(x) Bank of America, N.A.’s prime rate, ~~(b)~~(y) the federal funds rate plus 0.50% or ~~(c)~~(z) the sum of 1%1.00% plus one-month ~~LIBOR)~~Term SOFR) plus a specified margin, which may be adjusted upward or downward depending on whether certain criteria are satisfied. At ~~December~~March 31, ~~2017,~~2022, the interest spread on the Revolving Credit Facility ~~and Term Loan~~ was ~~150~~112.5 basis points. ~~The weighted-average interest rate on borrowings outstanding under the Term Loan at December 31, 2017 was 2.85%.~~

The Credit Agreement contains various restrictions and covenants, including ~~requirements~~a requirement that the Company maintain a leverage ratio at certain ~~financial ratios at prescribed~~ levels, ~~and restrictions,~~ subject to certain exceptions, restrictions on the ability of the Company and certain of its subsidiaries to consolidate or merge, create liens, incur additional subsidiary indebtedness ~~dispose of assets,~~and consummate acquisitions and ~~make investments in joint ventures~~a restriction on the disposition of all or substantially all of the assets of the Company and ~~foreign subsidiaries.~~

its subsidiaries taken as a whole.

The Credit Agreement ~~contains~~requires the ~~following financial covenants:~~

~~Leverage Ratio: A~~Company to maintain a maximum leverage ratio (defined as, with certain adjustments, the ratio of the Company’s consolidated indebtedness to the Company’s consolidated net income for the previous four quarters before interest, taxes, depreciation, amortization, non-cash charges and certain other items (EBITDA)) as of the last day of any fiscal quarter of ~~4.50~~3.75 to ~~1.00.~~

~~Interest Coverage Ratio: A minimum interest coverage ratio (defined as, with certain adjustments, the ratio of the Company’s consolidated EBITDA~~1.00, subject to the Company’s ~~consolidated cash interest expense) as of~~right to temporarily increase the ~~last day of any fiscal quarter of 2.50 to 1.00.~~

~~Senior Secured Leverage Ratio: A~~ maximum ~~senior secured~~ leverage ratio ~~(defined as, with certain adjustments, the ratio of the Company’s consolidated secured indebtedness~~ to ~~the Company’s consolidated EBITDA) of 3.00~~4.25 to ~~1.00.~~

~~With certain exceptions, the Company may elect to have the collateral pledged~~1.00 in connection with the Credit Agreement released during any period that the Company maintains an investment grade corporate family rating from either S&P Global Ratings or Moody’s Investor Service. During any such period when the collateral has been released, the Company’s leverage ratio as of the last day of any fiscal quarter must not be greater than 3.75 to 1.00, and the Company would not be subject to any additional requirement to limit its senior secured leverage ratio.

certain material acquisitions. The Company was in compliance with the financial ~~covenants~~covenant contained in the Credit Agreement as of ~~December~~March 31, ~~2017.~~

Additionally, with certain exceptions, the Credit Agreement limits the ability of the Company to pay dividends and other distributions, including repurchases of shares of its Common Stock. However, so long as no event of default exists under the Credit Agreement or would result from such payment, the Company may pay dividends and other distributions after March 3, 2010 in an aggregate amount not exceeding the sum of:


i.	50% of the consolidated net income of the Company and its subsidiaries (or if such consolidated net income is a deficit, minus 100% of such deficit), accrued on a cumulative basis during the period beginning on January 1, 2010 and ending on the last day of the fiscal quarter immediately preceding the date of the applicable proposed dividend or distribution; and


~~ii.~~	~~100% of the aggregate net proceeds received by the Company subsequent to March 3, 2010 either as a contribution to its common equity capital or from the issuance and sale of its Common Stock.~~

2022.

In ~~February 2014,~~May 2018, the Company issued ~~$250.0~~$300.0 million of ~~5.375%~~4.600% unsecured senior notes due May 15, 2028 (the “2028 Senior Notes”). In February 2020, the Company issued $300.0 million of 3.100% unsecured senior notes due March 1, ~~2022~~2030 (the ~~“2022 Senior Notes”). In March 2015, the Company issued $250.0 million of 5.375% unsecured senior notes due March 1, 2025 (the “2025~~“2030 Senior Notes”). The ~~proceeds of both note issuances~~2028 Senior Notes and the 2030 Senior Notes were ~~used~~issued pursuant to ~~repay existing outstanding notes of~~an indenture (the “Indenture”) between the ~~Company.~~Company and a trustee. The Indenture contains customary affirmative and negative covenants. The Company has the option to redeem the ~~2022~~2028 and 2030 Senior Notes ~~and the 2025 Senior Notes~~at any time for a ~~premium after March 1, 2017 and March 1, 2020, respectively.~~

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~The 2022 Senior Notes and the 2025 Senior Notes were issued pursuant to separate indentures (the “Indentures”) among~~premium.

In September 2019, the Company entered into a 220.0 million Chinese renminbi uncommitted line of credit to provide short-term finance support to operations in China. There were 0 outstanding borrowings on the ~~subsidiary guarantors named therein and~~uncommitted line of credit as of March 31, 2022 or December 31, 2021. The line of credit carries a ~~trustee. The Indentures contain customary affirmative and negative covenants. Certain of~~variable interest rate that is set by the Company’s subsidiaries jointly, severally, fully and unconditionally guarantee the Company’s obligations under the 2022 Senior Notes and 2025 Senior Notes. See Note 20 of the Notes to Condensed Consolidated Financial Statements for separate financial information of the subsidiary guarantors.

lender, which was approximately 4.2% at March 31, 2022.

The fair value of the long-term debt is estimated based upon Level 2 inputs to reflect the market rate of the Company’s debt. At ~~December~~March 31, ~~2017,~~2022, the fair value of the ~~2022~~2028 Senior Notes and the ~~2025~~2030 Senior Notes was estimated to be ~~$257~~$308 million ($~~260~~338 million at ~~September 30, 2017)~~December 31, 2021) and ~~$264~~$278 million ($~~264~~313 million at ~~September 30, 2017)~~December 31, 2021), respectively. The fair value of the Term Loan approximated its book value at ~~both~~ December 31, ~~2017 and September 30, 2017.~~2021. See Note 1117 of the Notes to Condensed Consolidated Financial Statements for the definition of a Level 2 input.

Table of Contents

12.	Warranties

~~8. Warranties~~

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 (such as engines, transmissions, tires, etc.) included in the Company’s end products 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 offers a variety of extended warranty programs. The premiums received for an extended warranty are generally deferred until after the expiration of the standard warranty period. The unearned premium is then recognized in income over the term of the extended warranty period in proportion to the costs that are expected to be incurred. Unamortized extended warranty premiums totaled $30.8 million and $29.4 million at December 31, 2017 and 2016, respectively.

~~Changes in the Company’s warranty liability and unearned extended warranty premiums were as follows (in millions):~~

Three Months Ended
December 31,
2017 2016
Balance at beginning of period $ 98.8
$ 89.6
Warranty provisions 12.0
10.7
Settlements made (12.8 ) (11.9 )
Changes in liability for pre-existing warranties, net 1.2
(1.1 )
Premiums received 2.6
2.8
Amortization of premiums received (2.6 ) (2.9 )
Foreign currency translation 0.1
(1.0 )
Balance at end of period $ 99.3
$ 86.2

Provisions for estimated warranty and other related costs are recorded at the time of sale and are periodically adjusted 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~~Company’s historical experience. It is reasonably possible that additional warranty and other related claims could arise from disputes or other matters in excess of amounts accrued; however, the Company does not expect that any such amounts, while not determinable, would have a material effect on the ~~Company's~~Company’s consolidated financial condition, results of operations or cash flows.

Changes in the Company’s assurance-type warranty liability were as follows (in millions):

	Three Months Ended March 31,
	2022			2021
Balance at beginning of period	$	65.7		$	64.6
Warranty provisions		11.1			10.3
Settlements made		(13.6	)		(17.0	)
Changes in liability for pre-existing warranties, net		(1.6	)		5.9
Foreign currency translation		—			(0.1	)
Acquisition		—			0.3
Balance at end of period	$	61.6		$	64.0

13.	Guarantee Arrangements

~~Table~~

Customers of ~~Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~9. Guarantee Arrangements~~

the Company, from time to time, may fund purchases of the Company’s equipment through third-party finance companies. In certain instances, the Company may be requested to provide support for these arrangements through credit or residual value guarantees, by which the Company agrees to make payments to the finance companies in certain circumstances as further described below.

Credit Guarantees:The Company is party to multiple agreements whereby at ~~December~~March 31, ~~2017 it~~2022 the Company guaranteed an aggregate of ~~$665.3~~$758.1 million in indebtedness of customers. The Company estimated that its maximum loss exposure under these contracts at ~~December~~March 31, ~~2017~~2022 was ~~$122.8~~$132.6 million. Terms of these guarantees coincide with the financing arranged by the customer and generally do not exceed five years. Under the terms of these ~~and various related~~ agreements and upon the occurrence of certain events, the Company generally has the ability to, among other things, take possession of the underlying collateral. If the financial condition of the customers were to deteriorate and result in their inability to make payments, then loss provisions in excess of amounts provided for at inception may be required. Given the Company’s position as original equipment manufacturer and its knowledge of end markets, the Company, when called upon to fulfill a guarantee, generally has been able to liquidate the financed equipment at a minimal loss, if any, to the Company. While the Company does not expect to experience losses under these agreements that are materially in excess of the amounts reserved, it cannot provide any assurance that the financial condition of the third parties will not deteriorate resulting in the third ~~parties~~’ parties’ inability to meet their obligations. In the event that this occurs, the Company cannot guarantee that the collateral underlying the agreements will be sufficient to avoid losses materially in excess of the amounts reserved. Any losses under these guarantees would generally be mitigated by the value of any underlying collateral, including financed ~~equipment, and are generally subject to the finance company's ability to provide the Company clear title to foreclosed equipment and other conditions.~~equipment. During periods of economic weakness, collateral values generally decline and can contribute to higher exposure to losses.

Table of Contents

Residual Value Guarantees: The Company is party to multiple agreements whereby at March 31, 2022 the Company guaranteed to support an aggregate of $96.1 million of customer equipment value. The Company estimated that its maximum loss exposure under these contracts at March 31, 2022 was $10.9 million. Terms of these guarantees coincide with the financing arranged by the customer and generally do not exceed five years. Under the terms of these agreements, the Company guarantees that a piece of equipment will have a minimum residual value at a future date. If the counterparty is not able to recover the agreed upon residual value through sale, or alternative disposition, the Company is responsible for a portion of the shortfall. The Company is generally able to mitigate a portion of the risk associated with these guarantees by staggering the maturity terms of the guarantees, diversification of the portfolio and leveraging knowledge gained through the Company’s own experience in the used equipment markets. There can be no assurance the Company’s historical experience in used equipment markets will be indicative of future results. The Company’s ability to recover losses experienced from its guarantees may be affected by economic conditions in used equipment markets at the time of loss. During periods of economic weakness, residual values generally decline and can contribute to higher exposure to losses.

Changes in the non-contingent portion of the Company’s ~~credit~~ guarantee ~~liability~~liabilities were as follows (in millions):

	Three Months Ended March 31,
	2022			2021
Balance at beginning of period	$	12.1		$	14.7
Provision for new credit guarantees		1.0			0.4
Changes for pre-existing guarantees, net		(2.5	)		(0.4	)
Amortization of previous guarantees		(0.5	)		(0.9	)
Balance at end of period	$	10.1		$	13.8

Upon the adoption of Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) 326, Financial Instruments – Credit Losses, the contingent portion of the guarantee liabilities that relates to current expected credit losses is recognized separately and is recorded within “Other current liabilities” and “Other long-term liabilities” in the Company’s Condensed Consolidated Balance Sheets.

Changes in the contingent portion of the Company’s guarantee liabilities were as follows (in millions):

	Three Months Ended March 31,
	2022		2021
Balance at beginning of period	$	4.0	$	6.9
Provision for new credit guarantees		0.6		0.3
Changes in allowance for pre-existing guarantees, net		5.0		(0.3	)
Foreign currency translation		0.1		—
Balance at end of period	$	9.7	$	6.9

14.	Contingencies, Significant Estimates and Concentrations

Three Months Ended
December 31,
2017 2016
Balance at beginning of period $ 9.1
$ 8.4
Provision for new credit guarantees 1.3
0.6
Changes for pre-existing guarantees, net —
0.1
Amortization of previous guarantees (0.6 ) (0.5 )
Foreign currency translation —
(0.1 )
Balance at end of period $ 9.8
$ 8.5

~~10. Shareholders' Equity~~

~~On August~~

Personal Injury Actions and Other - Product and general liability claims are made against the Company from time to time in the ordinary course of business. The Company is generally self-insured for future claims up to $5.0 million per claim. Accordingly, a reserve is maintained for the estimated costs of such claims. At March 31, ~~2015,~~2022 and December 31, 2021, the ~~Company's~~estimated net liabilities for product and general liability claims totaled $44.5 million and $45.1 million, respectively. There is inherent uncertainty as to the eventual resolution of unsettled claims. Management, however, believes that any losses in excess of established reserves will not have a material effect on the Company’s financial condition, results of operations or cash flows.

Table of Contents

Market Risks - The Company was contingently liable under bid, performance and specialty bonds totaling $1.46 billion and $1.24 billion at March 31, 2022 and December 31, 2021, respectively. Open standby letters of credit issued by the Company’s banks in favor of third parties totaled $21.8 million and $22.1 million at March 31, 2022 and December 31, 2021, respectively.

Other Matters - The Company is subject to 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. 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 will not have a material 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.

Major contracts for military systems are performed over extended periods of time and are subject to changes in scope of work and delivery schedules. Pricing negotiations on changes and settlement of claims often extend over prolonged periods of time. The Company’s ultimate profitability on such contracts may depend on the eventual outcome of an equitable settlement of contractual issues with the Company’s customers.

15.	Shareholders’ Equity

In May 2019, the Company’s Board of Directors ~~increased the Company's~~approved a Common Stock repurchase authorization byof 10,000,000 ~~shares, increasing the repurchase authorization to 10,299,198~~ shares. The Company repurchased ~~748,000~~751,309 shares of Common Stock under this authorization during the three months ended ~~December~~March 31, ~~2017~~2022 at a cost of ~~$63.7~~$85.0 million. ~~The Company did not repurchase any shares under this authorization during the three months ended December 31, 2016.~~ As of ~~December~~March 31, ~~2017,~~2022, the Company ~~repurchased 3,534,624 shares under this authorization at a cost of $175.7 million. The Company had 6,764,574~~has remaining authority to repurchase 4,417,254 shares of Common ~~Stock remaining under this repurchase authorization~~Stock.

16.	Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component were as follows (in millions):

	Three Months Ended March 31, 2022
	Employee Pension and Postretirement Benefits, Net of Tax			Cumulative Translation Adjustments			Derivative Instruments, Net of Tax			Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period	$	(25.6	)	$	(105.2	)	$	2.2		$	(128.6	)
Other comprehensive income (loss) before reclassifications		—			(6.5	)		0.9			(5.6	)
Amounts reclassified from accumulated other comprehensive income (loss)		0.4			—			(0.1	)		0.3
Net current period other comprehensive income (loss)		0.4			(6.5	)		0.8			(5.3	)
Balance at end of period	$	(25.2	)	$	(111.7	)	$	3.0		$	(133.9	)

	Three Months Ended March 31, 2021
	Employee Pension and Postretirement Benefits, Net of Tax			Cumulative Translation Adjustments			Derivative Instruments, Net of Tax			Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period	$	(94.7	)	$	(70.3	)	$	(0.5	)	$	(165.5	)
Other comprehensive income (loss) before reclassifications		—			(20.0	)		0.4			(19.6	)
Amounts reclassified from accumulated other comprehensive income (loss)		1.2			—			—			1.2
Net current period other comprehensive income (loss)		1.2			(20.0	)		0.4			(18.4	)
Balance at end of period	$	(93.5	)	$	(90.3	)	$	(0.1	)	$	(183.9	)

Table of ~~December 31, 2017. The Company is restricted by its Credit Agreement from repurchasing shares~~Contents

Reclassifications out of accumulated other comprehensive income (loss) included in ~~certain situations. See~~the computation of net periodic pension and postretirement benefit cost (See Note 74 of the Notes to Condensed Consolidated Financial Statements for ~~information~~additional details regarding ~~these restrictions.~~employee benefit plans) were as follows (in millions):

	Classification of Income (Expense)	Three Months Ended March 31,
		2022			2021
Amortization of employee pension and postretirement benefits items
Prior service costs	Miscellaneous, net	$	0.2		$	0.2
Actuarial losses	Miscellaneous, net		0.3			1.2
Total before tax			0.5			1.4
Tax benefit			(0.1	)		(0.2	)
Net of tax		$	0.4		$	1.2

17.	Fair Value Measurement

~~11. Fair Value Measurement~~

FASB ~~Accounting Standards Codification (ASC)~~ASC Topic 820, Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. FASB ASC Topic 820 requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment.

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

The three levels are defined as follows:


Level 1:	Unadjusted quoted prices in active markets for identical assets or liabilities.


Level 2:	Observable inputs other than quoted prices in active markets for identical assets or liabilities, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.


Level 3:	Unobservable inputs reflecting ~~management's~~management’s own assumptions about the inputs used in pricing the asset or liability.

~~There were no transfers~~

Table of ~~assets between levels during the three months ended December 31, 2017.~~

Contents

The fair ~~values~~value of the Company’s financial assets and liabilities were as follows (in millions):

	Level 1		Level 2		Level 3		Total
March 31, 2022
Assets:
SERP plan assets^(a)	$	15.8	$	—	$	—	$	15.8
Investment in equity securities^(b)		16.8		—		—		16.8
Foreign currency exchange derivatives^(c)		—		5.5		—		5.5
Liabilities:
Foreign currency exchange derivatives^(c)	$	—	$	0.8	$	—	$	0.8

December 31, 2021
Assets:
SERP plan assets^(a)	$	21.3	$	—	$	—	$	21.3
Investment in equity securities^(b)		14.2		—		—		14.2
Foreign currency exchange derivatives^(c)		—		3.7		—		3.7
Liabilities:
Foreign currency exchange derivatives^(c)	$	—	$	0.9	$	—	$	0.9

Level 1 Level 2 Level 3 Total
December 31, 2017
Assets:
SERP plan assets ^(a)
$ 22.2
$ —
$ —
$ 22.2
Foreign currency exchange derivatives ^(b)
—
0.8
—
0.8
Interest rate contracts ^(c)
—
0.3
—
0.3

Liabilities:
Foreign currency exchange derivatives ^(b)
$ —
$ 0.9
$ —
$ 0.9
Interest rate contracts ^(c)
—
0.2
—
0.2

September 30, 2017
Assets:
SERP plan assets ^(a)
$ 21.7
$ —
$ —
$ 21.7
Foreign currency exchange derivatives ^(b)
—
0.5
—
0.5
Interest rate contracts ^(c)
—
0.3
—
0.3

Liabilities:
Foreign currency exchange derivatives ^(b)
$ —
$ 1.2
$ —
$ 1.2
Interest rate contracts ^(c)
—
0.7
—
0.7

~~_________________________~~

⁽^a⁾

^(a)

Represents investments held in a rabbi trust for the ~~Company's~~Company’s non-qualified supplemental executive retirement plan (SERP). The fair values of these investments are determined using a market approach. Investments include mutual funds for which quoted prices in active markets are available. The Company records changes in the fair value of investments in “Miscellaneous, net” in the Condensed Consolidated Statements of Income.


^(b)	Represents investments in equity securities for which quoted prices in active markets are available. The Company records changes in the fair value of investments in “Miscellaneous, net” in the Condensed Consolidated Statements of Income.

⁽^c⁾	Based on observable market transactions of forward currency prices.

18.
^(c)	~~Based on observable market transactions of interest rate swap prices.~~ Business Segment Information

~~12. Stock-Based Compensation~~

In February 2017, the Company’s shareholders approved the 2017 Incentive Stock and Awards Plan (the “2017 Stock Plan”). The 2017 Stock Plan replaced the 2009 Incentive Stock and Awards Plan (as amended, the “2009 Stock Plan”). While no new awards will be granted under the 2009 Stock Plan or its predecessor, the 2004 Incentive Stock and Awards Plan, awards previously made under these two plans that were outstanding as of the approval date of the 2017 Stock Plan will remain outstanding and continue to be governed by the provisions of the respective stock plan under which they were issued. At December 31, 2017, the Company had reserved 8,175,910 shares of Common Stock available for issuance to provide for the exercise of outstanding stock options and the issuance of Common Stock under incentive compensation awards, including awards issued prior to the effective date of the 2017 Stock Plan.

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

The Company recognizes stock-based compensation expense over the requisite service period for vesting of an award, or to an employee's eligible retirement date, if earlier and applicable. Total stock-based compensation expense, including cash-based liability awards, for the three months ended December 31, 2017 and 2016 was $8.5 million ($6.6 million net of tax) and $7.9 million ($5.0 million net of tax), respectively.

~~13. Restructuring and Other Charges~~

In September 2016, the Company committed to transition its access equipment aftermarket parts distribution network to a third party logistics company. This initiative is intended to improve customer service levels, increase operational efficiency and allow the Company to reallocate resources to invest in future growth. The Company expected to incur cash charges related to severance costs and other employment-related benefits of approximately $3.0 million related to this decision, of which $0.2 million and $0.7 million was incurred in the three months ended December 31, 2017 and December 31, 2016, respectively.

In January 2017, the access equipment segment announced it had committed to certain restructuring plans as part of simplification activities in support of the Company’s MOVE strategy. The plans include the closure of its manufacturing plant and pre-delivery inspection facilities in Belgium, the streamlining of telehandler product offerings to a reduced range in Europe, the transfer of remaining European telehandler manufacturing to the Company’s facility in Romania and reductions in engineering staff supporting European telehandlers, including the closure of the UK-based engineering facility. The announced plans also include the move of North American telehandler production from Ohio to facilities in Pennsylvania. The Company recognized $3.1 million of restructuring costs under this program in the three months ended December 31, 2017 and expects another $4 million to be recognized in fiscal 2018.

The Company had originally expected total implementation costs for the September 2016 and January 2017 access equipment segment restructuring actions to be between $48 million and $53 million. The Company made significant progress on implementing these actions in fiscal 2017 however, during the three months ended December 31, 2017, the Company experienced issues that caused operational inefficiencies resulting in additional costs. The Company now expects total costs for these actions to be approximately $73 million, including approximately $30 million of operating costs. During the three months ended December 31, 2017, the access equipment segment recognized $13.0 million of operational costs related to these actions, and the Company expects another $6 million to be recognized in fiscal 2018.

In December 2017, the commercial segment announced it will undertake certain restructuring actions to realign a portion of the business under three product platforms. The Company expects to incur approximately $4.0 million of total restructuring-related costs in connection with the plan, which primarily consists of employee severance and termination benefits costs and one-time costs associated with the exit of underperforming branch facilities. The Company recognized $2.5 million of the costs in the three months ended December 31, 2017 and expects the remaining amount to be recognized in fiscal 2018.

~~Pre-tax restructuring charges for the three months ended December 31, 2017 were as follows (in millions):~~

Cost of Sales Selling, General and Administrative Expenses Total
Access equipment $ 3.3
$ —
$ 3.3
Commercial 0.6
1.9
2.5
Total $ 3.9
$ 1.9
$ 5.8

~~Pre-tax restructuring charges for the three months ended December 31, 2016 were as follows (in millions):~~

Cost of Sales Selling, General and Administrative Expenses Total
Access equipment $ 0.7
$ —
$ 0.7
Commercial —
0.4
0.4
Total $ 0.7
$ 0.4
$ 1.1

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Changes in the Company's restructuring reserves, included within~~ “~~Other current liabilities~~” ~~in the Condensed Consolidated Balance Sheets, were as follows (in millions):~~

Employee Severance and Termination Benefits Property, Plant and Equipment Impairment Other Costs Total
Balance at September 30, 2017 $ 19.8
$ —
$ 1.0
$ 20.8
Restructuring provision 3.7
1.0
1.1
5.8
Utilized - cash (7.0 ) —
(1.0 ) (8.0 )
Utilized - noncash —
(1.0 ) —
(1.0 )
Foreign currency translation 0.3
—
—
0.3
Balance at December 31, 2017 $ 16.8

$ —
$ 1.1

$ 17.9

Employee Severance and Termination Benefits
Balance at September 30, 2016 $ 0.9
Restructuring provision 1.1
Utilized - cash (0.3 )
Balance at December 31, 2016 $ 1.7

~~14. Employee Benefit Plans~~

~~Components of net periodic pension benefit cost were as follows (in millions):~~

Three Months Ended
December 31,
2017 2016
Components of net periodic benefit cost
Service cost $ 3.1
$ 3.3
Interest cost 4.5
4.4
Expected return on plan assets (5.0 ) (4.5 )
Amortization of prior service cost 0.4
0.4
Amortization of net actuarial loss 0.5
1.0
Net periodic benefit cost $ 3.5
$ 4.6

~~Components of net periodic other post-employment benefit cost were as follows (in millions):~~

Three Months Ended
December 31,
2017 2016
Components of net periodic benefit cost
Service cost $ 0.9
$ 0.6
Interest cost 0.5
0.4
Amortization of prior service cost (0.2 ) (0.2 )
Amortization of net actuarial loss —
0.1
Net periodic benefit cost $ 1.2
$ 0.9

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~15. Income Taxes~~

The Company recorded income tax expense of $4.7 million for the three months ended December 31, 2017, or 7.8% of pre-tax income, compared to $5.2 million, or 21.8% of pre-tax income, for the three months ended December 31, 2016. Results for the three months ended December 31, 2017 were favorably impacted by $10.3 million of net discrete tax benefits, including a ~~$3.3 million~~ ~~benefit related to share-based compensation tax deductions, and a~~ ~~$6.5 million~~ net benefit related to new tax legislation in the United States. Results for the three months ended December 31, 2016 were favorably impacted by $2.8 million of discrete tax benefits, including $2.1 million of tax benefits related to the release of valuation allowances on deferred tax assets for state net operating loss carryforwards and $0.7 million related to the release of valuation allowances on deferred taxes on federal capital loss carryforwards.

On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law by President Trump. The Tax Reform Act significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018, while also repealing the deduction for domestic production activities, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the law was enacted. As a result of the Tax Reform Act, the Company recorded a tax benefit of $23.9 million due to a remeasurement of deferred tax assets and liabilities and a tax charge of $17.4 million due to the transition tax on deemed repatriation of deferred foreign income, in the three months ended December 31, 2017. Both of the tax benefit and the tax charge represent provisional amounts and the Company’s current best estimates. Any adjustments recorded to the provisional amounts through the first quarter of fiscal 2019 will be included in income from operations as an adjustment to tax expense. The provisional amounts incorporate assumptions made based upon the Company’s current interpretation of the Tax Reform Act and may change as the Company receives additional clarification and implementation guidance.

~~Because of the complexity of the new Global Intangible Low-Taxed Income (GILTI) tax rules, the Company continues to evaluate this provision of the Tax Reform Act and the application of ASC 740,~~ ~~Income Taxes~~. Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company's measurement of its deferred taxes (the “deferred method”). The Company's selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing its global income to determine whether it expects to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Whether the Company expects to have future U.S. inclusions in taxable income related to GILTI depends on not only the Company's current structure and estimated future results of global operations, but also its intent and ability to modify its structure. The Company's currently in the process of analyzing its structure and, as a result, is not yet able to reasonably estimate the effect of this provision of the Tax Reform Act. Therefore, the Company has not made any adjustments related to potential GILTI tax in its financial statements and has not made a policy decision regarding whether to record deferred tax on GILTI.

The Company’s liability for gross unrecognized tax benefits, excluding related interest and penalties, was $37.3 million and $37.2 million as of December 31, 2017 and September 30, 2017, respectively. As of December 31, 2017, net unrecognized tax benefits, excluding interest and penalties, of $21.1 million would affect the Company’s net income if recognized.

The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits in the “Provision for income taxes” in the Condensed Consolidated Statements of Income. During the three months ended December 31, 2017 and 2016, the Company recognized costs of $0.3 million and $0.4 million, respectively, related to interest and penalties. At December 31, 2017, the Company had accruals for the payment of interest and penalties of $10.2 million. During the next twelve months, it is reasonably possible that federal, state and foreign tax audit resolutions could reduce net unrecognized tax benefits by approximately $3.0 million because the Company’s tax positions are sustained on audit, the Company agrees to their disallowance or the statutes of limitations close.

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~16. Accumulated Other Comprehensive Income (Loss)~~

~~Changes in accumulated other comprehensive income (loss) by component were as follows (in millions):~~

Three Months Ended December 31, 2017

Employee
Pension and Postretirement Benefits, Net of Tax
Cumulative Translation Adjustments Derivative Instruments Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period $ (46.2 ) $ (78.6 ) $ (0.2 ) $ (125.0 )
Other comprehensive income (loss) before reclassifications —
2.1
—
2.1
Amounts reclassified from accumulated other
comprehensive income (loss)
0.5
—
—
0.5
Net current period other comprehensive income (loss) 0.5

2.1

—
2.6
Balance at end of period $ (45.7 )
$ (76.5 )
$ (0.2 )
$ (122.4 )

Three Months Ended December 31, 2016

Employee
Pension and Postretirement Benefits, Net of Tax
Cumulative Translation Adjustments Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period $ (73.9 ) $ (101.1 ) $ (175.0 )
Other comprehensive income (loss) before reclassifications —
(30.4 ) (30.4 )
Amounts reclassified from accumulated other comprehensive income (loss) 0.8
—
0.8
Net current period other comprehensive income (loss) 0.8
(30.4 ) (29.6 )
Balance at end of period $ (73.1 ) $ (131.5 ) $ (204.6 )

Reclassifications out of accumulated other comprehensive income (loss) included in the computation of net periodic pension and postretirement benefit cost (refer to Note 14 of the Notes to Condensed Consolidated Financial Statements for additional details regarding employee benefit plans) were as follows (in millions):

Three Months Ended
December 31,
2017 2016
Amortization of employee pension and postretirement benefits items
Prior service costs $ 0.2
$ 0.2
Actuarial losses 0.5
1.1
Total before tax 0.7
1.3
Tax benefit (0.2 ) (0.5 )
Net of tax $ 0.5
$ 0.8

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~17. Earnings Per Share~~

~~The calculation of basic and diluted earnings per common share was as follows:~~

Three Months Ended
December 31,
2017 2016
Basic Earnings Per Share:
Weighted-average common shares outstanding 74,846,829
74,280,377

Diluted Earnings Per Share:
Basic weighted-average common shares outstanding 74,846,829
74,280,377
Dilutive stock options and other equity-based compensation awards 1,177,636
1,104,540
Diluted weighted-average common shares outstanding 76,024,465
75,384,917

~~Options not included in the computation of diluted earnings per share attributable to common shareholders because they would have been anti-dilutive were as follows:~~

Three Months Ended
December 31,
2017 2016
Stock options 261,675
393,975

~~18. Contingencies, Significant Estimates and Concentrations~~

~~Personal Injury Actions and Other~~ - Product and general liability claims are made against the Company from time to time in the ordinary course of business. The Company is generally self-insured for future claims up to $5.0 million per claim. Accordingly, a reserve is maintained for the estimated costs of such claims. At December 31, 2017 and September 30, 2017, the estimated net liabilities for product and general liability claims totaled $40.0 million and $39.1 million, respectively. There is inherent uncertainty as to the eventual resolution of unsettled claims. Management, however, believes that any losses in excess of established reserves will not have a material effect on the Company’s financial condition, results of operations or cash flows.

~~Market Risks~~ - The Company was contingently liable under bid, performance and specialty bonds totaling $630.3 million and $598.4 million at December 31, 2017 and September 30, 2017, respectively. Open standby letters of credit issued by the Company’s banks in favor of third parties totaled $94.9 million and $96.9 million at December 31, 2017 and September 30, 2017, respectively.

~~Other Matters~~ - The Company is subject to environmental matters and legal proceedings and claims, including patent, antitrust, product liability, breach of contract, warranty and state dealership regulation compliance proceedings, that arise in the ordinary course of business. 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 will not have a material 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.

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

The Company was one of several bidders on a large, multi-year military truck solicitation for the Canadian government. The Company's bid was not selected, and the Company subsequently submitted a legal challenge of that conclusion. In May 2016, the Canadian International Trade Tribunal (the “Tribunal”) ruled in the Company's favor in connection with that challenge. In December 2017, the Tribunal issued its determination outlining the compensation to which the Company is entitled as a result of the challenge. Due to the expectation that the Canadian government will appeal this matter, the Company has not recognized any gain for this matter as it is not yet realized or realizable.

~~19. Business Segment Information~~

The Company is organized into ~~four~~4 reportable segments based on the internal organization used by the ~~President and~~ Chief Executive Officer for making operating decisions and measuring performance and based on the similarity of customers served, common management, common use of facilities and economic results attained.

In accordance with FASB ASC Topic 280, Segment Reporting, for purposes of business segment performance measurement, the Company does not allocate to individual business segments costs or items that are of a non-operating nature or organizational or functional expenses of a corporate nature. The caption “Corporate” includes corporate office expenses, ~~share-based~~stock-based compensation, costs of certain business initiatives and shared services or operations benefiting multiple segments, and results of insignificant operations. Identifiable assets of the business segments exclude general corporate assets, which principally consist of cash and cash equivalents, certain property, plant and equipment, and certain other assets pertaining to corporate activities. Intersegment sales generally include amounts invoiced by a segment for work performed for another segment. Amounts are based on actual work performed and agreed-upon pricing, which is intended to be reflective of the contribution made by the supplying business segment.

Table of Contents

Selected financial information concerning the Company’s reportable segments and product lines is as follows (in millions):

	Three Months Ended March 31,
	2022								2021
	External Customers		Inter- segment			Net Sales			External Customers		Inter- segment			Net Sales
Net sales:
Access Equipment
Aerial work platforms	$	439.7	$	—		$	439.7		$	358.2	$	—		$	358.2
Telehandlers		229.7		—			229.7			175.2		—			175.2
Other		213.6		0.1			213.7			203.2		1.6			204.8
Total Access Equipment		883.0		0.1			883.1			736.6		1.6			738.2

Defense		535.2		0.4			535.6			614.3		0.4			614.7

Fire & Emergency		286.5		1.4			287.9			308.7		3.8			312.5

Commercial
Refuse collection		129.3		—			129.3			104.4		—			104.4
Concrete placement		85.1		—			85.1			97.3		—			97.3
Other		26.6		0.4			27.0			27.1		1.2			28.3
Total Commercial		241.0		0.4			241.4			228.8		1.2			230.0
Corporate and intersegment eliminations		—		(2.3	)		(2.3	)		0.6		(7.0	)		(6.4	)
Consolidated	$	1,945.7	$	—		$	1,945.7		$	1,889.0	$	—		$	1,889.0

	Three Months Ended March 31,
	2022			2021
Operating income (loss):
Access Equipment ^(a)	$	7.5		$	80.5
Defense		19.4			35.5
Fire & Emergency		22.4			47.4
Commercial		14.3			18.8
Corporate		(34.3	)		(41.4	)
Consolidated		29.3			140.8
Interest expense, net of interest income		(11.6	)		(11.2	)
Miscellaneous other income (expense)		1.1			3.1
Income before income taxes and earnings (losses) of unconsolidated affiliates	$	18.8		$	132.7

^(a)	Results for the three months ended March 31, 2021 include a $1.6 million benefit for restructuring and a $3.8 million charge for other costs related to restructuring plans.

Three Months Ended December 31,
2017 2016

External
Customers

Inter-
segment

Net
Sales

External
Customers

Inter-
segment

Net
Sales
Access equipment
Aerial work platforms $ 323.5
$ —
$ 323.5
$ 233.7
$ —
$ 233.7
Telehandlers 129.5
—
129.5
93.3
—
93.3
Other 175.2
—
175.2
162.2
—
162.2
Total access equipment 628.2
—
628.2
489.2
—
489.2

Defense 493.2
0.3
493.5
294.2
0.3
294.5

Fire & emergency 224.9
4.2
229.1
229.1
3.4
232.5

Commercial
Concrete placement 111.5
—
111.5
84.4
—
84.4
Refuse collection 101.2
—
101.2
92.2
—
92.2
Other 27.0
1.7
28.7
21.5
1.1
22.6
Total commercial 239.7
1.7
241.4
198.1
1.1
199.2
Corporate and intersegment eliminations 0.3
(6.2 ) (5.9 ) 0.8
(4.8 ) (4.0 )
Consolidated $ 1,586.3
$ —
$ 1,586.3
$ 1,211.4
$ —
$ 1,211.4

Table of Contents

	March 31, 2022		December 31, 2021
Identifiable assets:
Access Equipment:
U.S.	$	2,453.9	$	2,311.8
Europe, Africa and Middle East		456.5		460.3
Rest of the World		408.4		383.0
Total Access Equipment		3,318.8		3,155.1
Defense:
U.S.		1,357.9		1,225.0
Rest of the World		6.6		7.2
Total Defense		1,364.5		1,232.2
Fire & Emergency - U.S.		521.6		511.2
Commercial:
U.S.		390.0		379.6
Rest of the World		51.0		45.1
Total Commercial		441.0		424.7
Corporate - U.S. ^(a)		1,328.6		1,398.6
Consolidated	$	6,974.5	$	6,721.8

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

Three Months Ended
December 31,
2017 2016
Operating income (loss):
Access equipment $ 13.8
$ 24.4
Defense 65.2
23.8
Fire & emergency 25.1
17.0
Commercial 8.3
4.6
Corporate (38.6 ) (33.6 )
Consolidated 73.8
36.2
Interest expense, net of interest income (13.7 ) (13.9 )
Miscellaneous other income 0.5
1.3
Income before income taxes and equity in earnings of unconsolidated affiliates $ 60.6
$ 23.6

December 31, September 30,
2017
2017
Identifiable assets:
Access equipment:
U.S. $ 1,884.5
$ 1,905.5
Europe 525.0
541.0
Rest of the World 242.0
246.1
Total access equipment 2,651.5
2,692.6
Defense:
U.S. 818.0
775.1
Rest of the World 6.5
7.0
Total defense 824.5
782.1
Fire & emergency - U.S. 526.9
552.6
Commercial:
U.S. 359.4
377.3
Rest of the World 41.2
42.3
Total commercial 400.6
419.6
Corporate:
U.S. ^(a)
457.5
543.9
Rest of the World ^(b)
101.1
108.1
Total corporate 558.6
652.0
Consolidated $ 4,962.1
$ 5,098.9

~~_________________________~~


^(a)	~~Primarily includes cash and short-term investments.~~


^(b)	~~Primarily includes a corporate-led manufacturing facility that supports multiple operating segments.~~

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

⁽^a⁾Primarily includes cash and short-term investments and the Company’s global headquarters.

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

	Three Months Ended March 31, 2022
	Access Equipment		Defense		Fire & Emergency		Commercial		Eliminations			Total
Net sales:
North America	$	732.9	$	524.3	$	275.4	$	239.3	$	(2.3	)	$	1,769.6
Europe, Africa and Middle East		81.0		11.0		—		0.9		—			92.9
Rest of the World		69.2		0.3		12.5		1.2		—			83.2
Consolidated	$	883.1	$	535.6	$	287.9	$	241.4	$	(2.3	)	$	1,945.7

	Three Months Ended March 31, 2021
	Access Equipment		Defense		Fire & Emergency		Commercial		Eliminations			Total
Net sales:
North America	$	555.4	$	551.2	$	296.8	$	228.0	$	(6.4	)	$	1,625.0
Europe, Africa and Middle East		82.8		63.0		13.3		0.5		—			159.6
Rest of the World		100.0		0.5		2.4		1.5		—			104.4
Consolidated	$	738.2	$	614.7	$	312.5	$	230.0	$	(6.4	)	$	1,889.0

Three Months Ended December 31,
2017 2016
Net sales:
United States $ 1,233.2
$ 1,018.3
Other North America 43.5
35.7
Europe, Africa and Middle East 235.5
71.6
Rest of the World 74.1
85.8
Consolidated $ 1,586.3
$ 1,211.4

~~20. Separate Financial Information of Subsidiary Guarantors of Indebtedness~~

The 2022 Senior Notes and the 2025 Senior Notes are jointly, severally, fully and unconditionally guaranteed on a senior unsecured basis by all of the Company’s 100% owned existing and future subsidiaries that from time to time guarantee obligations under the Credit Agreement, with certain exceptions (the “Guarantors”).

Under the Indentures governing the 2022 Senior Notes and 2025 Senior Notes, a Guarantor’s guarantee of such Senior Notes will be automatically and unconditionally released and will terminate upon the following customary circumstances: (i) the sale of such Guarantor or substantially all of the assets of such Guarantor if such sale complies with the Indentures; (ii) if such Guarantor no longer guarantees certain other indebtedness of the Company; or (iii) the defeasance or satisfaction and discharge of the Indentures. The following condensed supplemental consolidating financial information reflects the summarized financial information of Oshkosh Corporation, the Guarantors on a combined basis and Oshkosh Corporation’s non-guarantor subsidiaries on a combined basis (in millions):

~~Condensed Consolidating Statement of Income and Comprehensive Income~~

~~For the Three Months Ended December 31, 2017~~

Oshkosh
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Net sales $ —
$ 1,372.2
$ 267.9
$ (53.8 ) $ 1,586.3
Cost of sales (0.9 ) 1,153.0
245.7
(53.7 ) 1,344.1
Gross income (loss) 0.9
219.2
22.2
(0.1 ) 242.2
Selling, general and administrative expenses 37.8
90.3
29.7
—
157.8
Amortization of purchased intangibles —
9.2
1.4
—
10.6
Operating income (loss) (36.9 ) 119.7
(8.9 ) (0.1 ) 73.8
Interest expense (19.0 ) (13.5 ) (0.8 ) 17.9
(15.4 )
Interest income 1.3
8.0
10.3
(17.9 ) 1.7
Miscellaneous, net 25.2
(62.0 ) 37.3
—
0.5
Income (loss) before income taxes (29.4 ) 52.2
37.9
(0.1 ) 60.6
Provision for (benefit from) income taxes 3.0
36.6
(35.1 ) 0.2
4.7
Income (loss) before equity in earnings of affiliates (32.4 ) 15.6
73.0
(0.3 ) 55.9
Equity in earnings of consolidated subsidiaries 88.8
57.1
(31.6 ) (114.3 ) —
Equity in earnings of unconsolidated affiliates —
—
0.5
—
0.5
Net income 56.4
72.7
41.9
(114.6 ) 56.4
Other comprehensive income (loss), net of tax 2.6
0.2
2.2
(2.4 ) 2.6
Comprehensive income $ 59.0
$ 72.9
$ 44.1
$ (117.0 ) $ 59.0

Table of Contents

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Condensed Consolidating Statement of Income and Comprehensive Income~~

~~For the Three Months Ended December 31, 2016~~

Oshkosh
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Net sales $ —
$ 1,049.8
$ 202.9
$ (41.3 ) $ 1,211.4
Cost of sales (0.8 ) 874.5
179.5
(41.5 ) 1,011.7
Gross income 0.8
175.3
23.4
0.2
199.7
Selling, general and administrative expenses 31.6
91.5
27.9
—
151.0
Amortization of purchased intangibles —
9.6
2.9
—
12.5
Operating income (loss) (30.8 ) 74.2
(7.4 ) 0.2
36.2
Interest expense (13.6 ) (13.6 ) (0.5 ) 13.0
(14.7 )
Interest income 0.7
4.1
9.0
(13.0 ) 0.8
Miscellaneous, net 22.5
(52.2 ) 31.0
—
1.3
Income (loss) before income taxes (21.2 ) 12.5
32.1
0.2
23.6
Provision for (benefit from) income taxes (5.1 ) 3.0
7.2
0.1
5.2
Income (loss) before equity in earnings of affiliates (16.1 ) 9.5
24.9
0.1
18.4
Equity in earnings of consolidated subsidiaries 35.3
15.7
(10.7 ) (40.3 ) —
Equity in earnings of unconsolidated affiliates —
—
0.8
—
0.8
Net income 19.2
25.2
15.0
(40.2 ) 19.2
Other comprehensive income (loss), net of tax (29.6 ) (0.9 ) (29.2 ) 30.1
(29.6 )
Comprehensive income $ (10.4 ) $ 24.3
$ (14.2 ) $ (10.1 ) $ (10.4 )

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Condensed Consolidating Balance Sheet~~

~~As of December 31, 2017~~

Oshkosh
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Assets
Current assets:
Cash and cash equivalents $ 347.3
$ 6.0
$ 25.8
$ —
$ 379.1
Receivables, net 22.8
996.9
258.9
(49.2 ) 1,229.4
Inventories, net —
802.4
417.5
—
1,219.9
Other current assets 45.9
31.4
10.9
—
88.2
Total current assets 416.0
1,836.7
713.1
(49.2 ) 2,916.6
Investment in and advances to consolidated subsidiaries 3,209.0
1,411.3
(84.3 ) (4,536.0 ) —
Intercompany receivables 47.9
260.1
1,975.8
(2,283.8 ) —
Intangible assets, net —
900.2
612.9
—
1,513.1
Other long-term assets 107.6
268.7
156.1
—
532.4
Total assets $ 3,780.5
$ 4,677.0
$ 3,373.6
$ (6,869.0 ) $ 4,962.1

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 7.3
$ 433.5
$ 162.8
$ (48.8 ) $ 554.8
Customer advances —
548.0
3.3
—
551.3
Other current liabilities 104.4
240.6
114.7
(0.4 ) 459.3
Total current liabilities 111.7
1,222.1
280.8
(49.2 ) 1,565.4
Long-term debt, less current maturities 803.4
—
—
—
803.4
Intercompany payables 468.4
1,767.5
47.9
(2,283.8 ) —
Other long-term liabilities 103.6
184.3
12.0
—
299.9
Total shareholders' equity 2,293.4
1,503.1
3,032.9
(4,536.0 ) 2,293.4
Total liabilities and shareholders' equity $ 3,780.5
$ 4,677.0
$ 3,373.6
$ (6,869.0 ) $ 4,962.1

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Condensed Consolidating Balance Sheet~~

~~As of September 30, 2017~~

Oshkosh
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Assets
Current assets:
Cash and cash equivalents $ 399.5
$ 4.6
$ 42.9
$ —
$ 447.0
Receivables, net 28.3
1,025.5
316.1
(63.6 ) 1,306.3
Inventories, net —
819.3
379.1
—
1,198.4
Other current assets 45.4
31.9
10.8
—
88.1
Total current assets 473.2
1,881.3
748.9
(63.6 ) 3,039.8
Investment in and advances to consolidated subsidiaries 3,138.3
1,340.4
(59.6 ) (4,419.1 ) —
Intercompany receivables 48.0
261.6
1,971.8
(2,281.4 ) —
Intangible assets, net —
909.5
611.3
—
1,520.8
Other long-term assets 69.1
242.9
226.3
—
538.3
Total assets $ 3,728.6
$ 4,635.7
$ 3,498.7
$ (6,764.1 ) $ 5,098.9

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 11.6
$ 517.2
$ 176.4
$ (54.2 ) $ 651.0
Customer advances —
510.7
2.7
—
513.4
Other current liabilities 105.2
304.9
118.0
(9.4 ) 518.7
Total current liabilities 116.8
1,332.8
297.1
(63.6 ) 1,683.1
Long-term debt, less current maturities 807.9
—
—
—
807.9
Intercompany payables 452.9
1,780.5
48.0
(2,281.4 ) —
Other long-term liabilities 43.6
134.1
122.8
—
300.5
Total shareholders' equity 2,307.4
1,388.3
3,030.8
(4,419.1 ) 2,307.4
Total liabilities and shareholders' equity $ 3,728.6
$ 4,635.7
$ 3,498.7
$ (6,764.1 ) $ 5,098.9

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Condensed Consolidating Statement of Cash Flows~~

~~For the Three Months Ended December 31, 2017~~

Oshkosh
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Net cash provided (used) by operating activities $ (5.8 ) $ (4.4 ) $ 39.4
$ —
$ 29.2

Investing activities:
Additions to property, plant and equipment (1.5 ) (11.7 ) (5.5 ) —
(18.7 )
Additions to equipment held for rental —
—
(1.2 ) —
(1.2 )
Proceeds from sale of equipment held for rental —
—
2.5
—
2.5
Intercompany investing —
13.0
(58.9 ) 45.9
—
Other investing activities (0.7 ) (0.1 ) —
—
(0.8 )
Net cash provided (used) by investing activities (2.2 ) 1.2
(63.1 ) 45.9
(18.2 )

Financing activities:
Proceeds from issuance of debt (original maturities greater than three months) —
—
6.5
—
6.5
Repayments of debt (original maturities greater than three months) (5.0 ) —
—
—
(5.0 )
Repurchases of Common Stock (71.1 ) —
—
—
(71.1 )
Dividends paid (18.0 ) —
—
—
(18.0 )
Proceeds from exercise of stock options 8.6
—
—
—
8.6
Intercompany financing 41.3
4.6
—
(45.9 ) —
Net cash provided (used) by financing activities (44.2 ) 4.6
6.5
(45.9 ) (79.0 )

Effect of exchange rate changes on cash —
—
0.1
—
0.1
Increase (decrease) in cash and cash equivalents (52.2 ) 1.4
(17.1 ) —
(67.9 )
Cash and cash equivalents at beginning of period 399.5
4.6
42.9
—
447.0
Cash and cash equivalents at end of period $ 347.3
$ 6.0
$ 25.8
$ —
$ 379.1

~~Table of Contents~~

~~OSHKOSH CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~Condensed Consolidating Statement of Cash Flows~~

~~For the Three Months Ended December 31, 2016~~

Oshkosh
Corporation

Guarantor
Subsidiaries

Non-Guarantor
Subsidiaries
Eliminations Total
Net cash provided (used) by operating activities $ (42.8 ) $ 67.0
$ 59.6
$ —
$ 83.8

Investing activities:
Additions to property, plant and equipment (0.4 ) (9.1 ) (4.7 ) —
(14.2 )
Additions to equipment held for rental —
—
(12.9 ) —
(12.9 )
Proceeds from sale of equipment held for rental —
—
5.3
—
5.3
Intercompany investing —
498.1
(39.0 ) (459.1 ) —
Other investing activities (0.2 ) —
—
—
(0.2 )
Net cash provided (used) by investing activities (0.6 ) 489.0
(51.3 ) (459.1 ) (22.0 )

Financing activities:
Repayments of debt (original maturities greater than three months) (20.0 ) —
—
—
(20.0 )
Repurchases of Common Stock (3.0 ) —
—
—
(3.0 )
Dividends paid (15.6 ) —
—
—
(15.6 )
Proceeds from exercise of stock options 26.2
—
—
—
26.2
Intercompany financing 93.9
(553.0 ) —
459.1
—
Net cash provided (used) by financing activities 81.5
(553.0 ) —
459.1
(12.4 )

Effect of exchange rate changes on cash —
(0.2 ) (1.5 ) —
(1.7 )
Increase in cash and cash equivalents 38.1
2.8
6.8
—
47.7
Cash and cash equivalents at beginning of period 285.4
1.7
34.8
—
321.9
Cash and cash equivalents at end of period $ 323.5
$ 4.5

$ 41.6

$ —
$ 369.6


ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cautionary Statement About Forward-Looking Statements

This ~~Management's~~Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report on Form 10-Q contain statements that ~~Oshkosh Corporation (the “Company”)~~the Company believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, 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 caption ~~“Executive Overview”~~“Overview” are forward-looking statements. When used in this Quarterly Report on Form 10-Q, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These factors include the extent of supply chain and logistics disruptions; the Company’s ability to increase prices or impose surcharges to raise margins or to offset higher input costs, including increased raw material, labor and freight costs; the Company’s ability to attract and retain production labor in a timely manner; the cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, which are particularly impacted by the strength of U.S. and European economies and construction seasons; the Company’s estimates of access equipment demand which, among other factors, is influenced by historical customer ~~historical~~ buying patterns and rental company fleet replacement strategies; the strength of the U.S. dollar and its impact on Company exports, translation of foreign sales and the cost of purchased materials; the ~~expected~~Company’s ability to predict the level and timing of orders for indefinite delivery/indefinite quantity contracts with the U.S. federal government; the impact of any U.S. Department of Defense (DoD) and international defense customer procurement of products and services and acceptance of and funding or payments for such products and services; risks related to reductions in government expenditures in light of U.S. defense budget pressures, sequestration and an uncertain DoD tactical wheeled vehicle strategy; the impact of any DoD solicitation for competition for future contracts to produce military ~~vehicles, including a future Family~~vehicles; the impacts of ~~Medium Tactical Vehicles production contract;~~budget constraints facing the ~~Company’s ability to increase prices to raise margins or offset higher input costs; increasing commodity~~U.S. Postal Service (USPS) and other raw material costs, particularly in a sustained economic recovery; risks related to facilities expansion, consolidation and alignment, including the amounts of related costs and charges and that anticipated cost savings may not be achieved; projected adoption rates of work at height machinery in emerging markets;continuously changing demands for postal services; the impact of severe weather, orwar, natural disasters or pandemics that may affect the Company, its suppliers or its customers; risks related to the ~~collectibility~~collectability of receivables, particularly for those businesses with exposure to construction markets; the cost of any warranty campaigns related to the Company’s products; risks associated with international operations and sales, including compliance with the Foreign Corrupt Practices Act; risks that a trade war and related tariffs could reduce the competitiveness of the Company’s products; the Company’s ability to comply with complex laws and regulations applicable to U.S. government contractors; cybersecurity risks and costs of defending against, mitigating and responding to data security threats and ~~breaches;~~breaches impacting the Company; the Company’s ability to successfully identify, complete and integrate acquisitions and to realize the anticipated benefits associated with the same; and risks related to the Company’s ability to successfully execute on its strategic road map and meet its long-term financial goals. Additional information concerning these and other factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the ~~Company's~~Company’s U.S. Securities and Exchange Commission (SEC) filings, including, but not limited to, the ~~Company's~~Company’s Current Report on Form 8-K filed with the SEC on ~~January 25, 2018~~April 27, 2022 and Item 1A. of Part II of this Quarterly Report on Form 10-Q.

All forward-looking statements, including those under the caption ~~“Executive Overview,~~“Overview,” speak only as of the date the Company files this Quarterly Report on Form 10-Q with the SEC. The Company assumes no obligation, and disclaims any obligation, to update information contained in this Quarterly Report on Form 10-Q. Investors should be aware that the Company may not update such information until the Company’s next quarterly earnings conference call, if at all.

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

Table of Contents

General

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

Access ~~equipment~~ 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, as well as carriers and wreckers. Access ~~equipment~~Equipment customers include equipment rental companies, construction contractors, manufacturing companies, home improvement centers and towing ~~companies in the U.S. and abroad.~~

companies.

Defense— tactical ~~trucks,~~vehicles, trailers, weapons system integration and supply parts and services sold to the U.S. military and to other militaries around the ~~world.~~

world, last mile delivery vehicles for the USPS, and snow removal vehicles for military and civilian airports.

Fire & ~~emergency~~ Emergency— custom and commercial firefighting vehicles and equipment, aircraft rescue and firefighting ~~vehicles, snow removal~~(ARFF) vehicles, simulators, mobile command and control vehicles and other emergency vehicles primarily sold to fire departments, airports and other governmental units, ~~and~~as well as broadcast vehicles sold to broadcasters and TV ~~stations in the U.S. and abroad.~~

stations.

Commercial— ~~concrete mixers,~~ refuse collection vehicles ~~portable and stationary concrete batch plants and vehicle components~~ sold to ~~ready-mix companies and~~ commercial and municipal waste haulers, ~~in the Americas and other international markets~~concrete mixers sold to ready-mix companies and field service vehicles and truck-mounted cranes sold to mining, construction and other ~~companies in the U.S. and abroad.~~

~~Executive~~ companies.

Overview

The Company reported ~~earnings per share~~a net loss of ~~$0.74 in the first quarter of fiscal 2018, which exceeded both earnings~~$0.03 per share for the first quarter of fiscal ~~2017 and the Company's expectations. Improved results in the defense, fire & emergency and commercial segments and a lower provision for~~2022, down from net income ~~taxes were offset in part by lower access equipment segment operating income and higher corporate expenses. Results~~of $1.44 per share for the ~~first quarter of fiscal 2018 included $14.1 million, or $0.18~~three months ended March 31, 2021. The decrease in earnings per share of after-tax charges and operating inefficiencies associated with restructuring actions in the access equipment and commercial segments. Results for the first quarter of fiscal 2018 benefited from one-time discrete tax benefits of $6.5 million, or $0.08 per share, as a result of the implementation of tax reform in the United States.

~~Consolidated net sales increased $374.9 million, or 30.9%, to $1.59 billion~~ in the first quarter of fiscal ~~2018 compared~~2022 was primarily due to unfavorable price/cost dynamics, higher manufacturing costs, due in part to component shortages and labor challenges, and a charge of $18.1 million, or $0.27 per share, associated with taxes on previous income as the Company revised its interpretation of certain foreign anti-hybrid tax legislation based upon comments from the corresponding taxing authorities of the applicable jurisdiction during the quarterThe Company believes that price/cost headwinds peaked in the first quarter in fiscal 2022 at approximately $125 million.

Prior to Russia’s invasion of Ukraine, steel, aluminum and freight costs had moderated and the Company expected that this moderation would continue. Since the invasion, pronounced increases in these costs have occurred. With commodity and freight costs trending up again, all of the Company’s non-defense segments have remained agile and have taken additional pricing actions. Pricing actions in the Access Equipment and Commercial segments in the first quarter of fiscal ~~2017. The increase~~2022 impacted orders in backlog, which the Company expects to mitigate some of the additional cost headwinds the Company is facing.

While new cost pressures have emerged that the Company expects will impact fiscal 2022, the Company expects improvement in price/cost dynamics in the second quarter of fiscal 2022 and further improvement in the second half of fiscal 2022, when it expects to be largely price/cost neutral compared to the beginning of fiscal 2021. In total, the Company expects price/cost headwinds of approximately $180 million to $200 million for fiscal 2022, up from its previous expectation of $140 million to $150 million, with the first and second quarters of fiscal 2022 experiencing the majority of the revised impact.

Consolidated sales in the first quarter of fiscal ~~2018~~2022 increased 3.0 percent compared to the ~~first quarter~~three months ended March 31, 2021 to $1.95 billion largely as a result of ~~fiscal 2017~~improved pricing and increased product content. Sales volume was ~~driven by double-digit percentage increases in the defense, access equipment and commercial segments. Order intake was up in all four segments in the first quarter of fiscal 2018 as~~relatively flat compared to the ~~first quarter~~three months ended March 31, 2021 as the impact of ~~fiscal 2017. The Company believes that the order activity experienced~~increased shipments of access equipment in North America was offset by lower sales volumes in the ~~first quarter of fiscal 2018 in all non-defense segments reflects the broader, positive macro-economic conditions in its markets, especially in the United States.~~

Consolidated operating income increased 103.9% to $73.8 million, or 4.7% of sales, in the first quarter of fiscal 2018 compared to $36.2 million, or 3.0% of sales, in the first quarter of fiscal 2017. First quarter fiscal 2018 results included $18.6 million of chargesDefense, Fire & Emergency and ~~operating inefficiencies associated with restructuring actions in the access equipment and commercial~~Commercial segments. ~~The increase in~~

Consolidated operating income in the first quarter of fiscal ~~2018~~2022 decreased 79.2 percent to $29.3 million, or 1.5 percent of sales, compared to $140.8 million, or 7.5 percent of sales, for the three months ended March 31, 2021. The decrease was primarily due to unfavorable price/cost dynamics and higher manufacturing costs, due in part to component shortages and labor challenges, offset in part by improved mix.

Table of Contents

During the first quarter of fiscal ~~2017~~2022, the Company amended and extended its credit agreement to March 2027. In conjunction with the extension, the Company repaid its outstanding term loan with a balance of $225 million at December 31, 2021 and increased its revolving credit facility from $850 million to $1.1 billion.

Recent COVID related lockdowns in China have also introduced additional volatility to global supply chains. The Company’s previous outlook for fiscal 2022 assumed moderate supply chain improvements throughout the year. The pace of supply chain improvement remains uncertain. As a result of additional material and freight cost pressures, supply chain disruptions and labor challenges, the Company revised its fiscal 2022 earnings per share estimate range from $5.75 to $6.75 to a range of $4.75 to $5.75 on estimated operating income of $475 million to $560 million and consolidated sales of between $8.1 billion and $8.6 billion. The revised estimate includes an approximate $0.25 per share charge related to taxes on foreign anti-hybrid tax legislation recorded in the first quarter of fiscal 2022. Excluding this item, the Company’s adjusted earnings per share estimate range for fiscal 2022 is $5.00 to $6.00.

The Company now expects Access Equipment segment fiscal 2022 sales will be $3.8 billion to $4.2 billion compared to the Company’s previous estimate range of $3.7 billion to $4.1 billion largely due to the additional pricing actions in the first quarter of fiscal 2022. The Company now expects Access Equipment segment fiscal 2022 operating income margin to be 8.0% to 8.75% compared to the Company’s previous operating income margin estimate range of 9.0% to 10.0%. Increased freight and component costs are contributing to the lower operating income expectations.

The Company continues to expect Defense segment fiscal 2022 sales to be approximately $2.2 billion. The Company has revised the Defense segment fiscal 2022 operating income margin expectation from approximately 7.0% to approximately 6.25% as the more persistent inflationary environment caused unfavorable cumulative catch-up adjustments in the first quarter of fiscal 2022.

The Company continues to expect Fire & Emergency segment fiscal 2022 sales to be approximately $1.2 billion. The Company is reducing the Fire & Emergency segment fiscal 2022 operating income margin estimate from approximately 13.0% to a range of 11.0% to 11.75%. The decline in expectations reflects increased supply chain disruptions, labor inefficiencies and additional cost pressures.

The Company continues to expect Commercial segment fiscal 2022 sales to be $1.0 billion to $1.1 billion. The Company is reducing the Commercial segment fiscal 2022 operating income margin estimate from approximately 7.0% to approximately 6.5%.

The Company continues to expect corporate expenses in fiscal 2022 will be approximately $160 million. As a result of the tax charge associated with anti-hybrid tax legislation in the first quarter of fiscal 2022, the Company increased its estimated effective tax rate for fiscal 2022 from approximately 22.5% to approximately 26.0%.

The Company expects consolidated sales for the second quarter of fiscal 2022 to be approximately flat with the three months ended June 30, 2021, with Access Equipment segment sales up approximately 15% and Defense segment sales down by approximately 20%. The Company expects additional price realization in its non-Defense segments during the second quarter of fiscal 2022 as more sales will reflect price increases and surcharges implemented over the past twelve months. The Company expects a low to mid-single digit consolidated operating income margin in the second quarter of fiscal 2022.

Table of Contents

RESULTS OF OPERATIONS – FIRST QUARTER OF FISCAL 2022 COMPARED WITH THE THREE MONTHS ENDED MARCH 31, 2021

CONSOLIDATED RESULTS

The following table presents consolidated results (in millions):

	Three Months Ended March 31,
	2022			2021			Change			% Change
Net sales	$	1,945.7		$	1,889.0		$	56.7			3.0	%
Cost of sales		1,744.4			1,573.9			170.5			10.8	%
Gross income		201.3			315.1			(113.8	)		-36.1	%
% of sales		10.3	%		16.7	%		-630	bps
SG&A expenses		169.2			172.0			(2.8	)		-1.6	%
Amortization		2.8			2.3			0.5			21.7	%
Operating income		29.3			140.8			(111.5	)		-79.2	%
% of sales		1.5	%		7.5	%		-590	bps

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

	Three Months Ended March 31,
	2022		2021		Change			% Change
North America	$	1,769.6	$	1,625.0	$	144.6			8.9	%
Europe, Africa and Middle East		92.9		159.6		(66.7	)		-41.8	%
Rest of the World		83.2		104.4		(21.2	)		-20.3	%
	$	1,945.7	$	1,889.0	$	56.7			3.0	%

Consolidated net sales increased largely as a result of improved pricing ($48 million) and a sales mix which included more third-party chassis ($13 million). Sales volume was relatively flat as the impact of increased shipments of access equipment in North America was offset by lower sales volumes in the Defense, Fire & Emergency and Commercial segments.

The decrease in consolidated gross margin was due to higher material & logistics costs (780 basis points) and higher manufacturing costs (100 basis points), offset in part by improved pricing (190 basis points) and improved mix (60 basis points).

The decrease in consolidated selling, general and administrative expenses was generally due to lower incentive compensation costs ($12 million), offset in part byhigher reserves for bad debts ($3 million), increased travel costs ($2 million), higher salary costs ($2 million) and higher product liability costs ($2 million).

The decrease in consolidated operating income was primarily due to unfavorable material & logistics costs ($151 million) and higher manufacturing costs ($20 million), in part due to parts shortages and labor challenges, offset in part by improved pricing ($48 million) and improved mix ($16 million).

The following table presents consolidated non-operating changes (in millions):

	Three Months Ended March 31,
	2022			2021			Change			% Change
Interest expense, net of interest income	$	(11.6	)	$	(11.2	)	$	(0.4	)		3.6	%
Miscellaneous income (expense)		1.1			3.1			(2.0	)		-64.5	%

Provision for income taxes		20.2			33.2			(13.0	)		-39.2	%
Effective tax rate		107.4	%		25.0	%

Gains (losses) of unconsolidated affiliates	$	(0.7	)	$	0.1		$	(0.8	)		-800.0	%

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Other miscellaneous expense primarily related to gains and losses on investments, net foreign currency transaction gains and losses, and non-service costs of the Company’s pension plans.

The provision for income taxes for the three months ended March 31, 2022 included a charge of $18.1 million related to taxes on income generated in prior periods as the Company revised its interpretation of certain foreign anti-hybrid tax legislation based upon comments from the corresponding taxing authorities in the quarter.

Gains and losses of unconsolidated affiliates primarily represented changes in the Company’s equity method investments.

SEGMENT RESULTS

Access Equipment

The following table presents the Access Equipment segment results (in millions):

	Three Months Ended March 31,
	2022			2021			Change			% Change
Net sales	$	883.1		$	738.2		$	144.9			19.6	%
Cost of sales		817.3			603.3			214.0			35.5	%
Gross income		65.8			134.9			(69.1	)		-51.2	%
% of sales		7.5	%		18.3	%		-1080	bps
SG&A expenses		58.2			54.3			3.9			7.2	%
Amortization		0.1			0.1			—			0.0	%
Operating income		7.5			80.5			(73.0	)		-90.7	%
% of sales		0.8	%		10.9	%		-1010	bps

Access Equipment segment net sales increased largely as a result of robust demand for access equipment in North America.

The decrease in gross margin in the Access Equipment segment was due to unfavorable material & logistics costs (1,380 basis points) offset in part by improved pricing (230 basis points).

The decrease in operating income in the Access Equipment segment was primarily due to unfavorable material & logistics costs ($121 million) and higher manufacturing costs, largely associated with the implementation of manufacturing initiatives ($15 million), offset in part by the impact of higher gross margin associated with higher sales volume ($31 million) and improved pricing ($28 million).

Defense

The following table presents the Defense segment results (in millions):

	Three Months Ended March 31,
	2022			2021			Change			% Change
Net sales	$	535.6		$	614.7		$	(79.1	)		-12.9	%
Cost of sales		483.1			545.3			(62.2	)		-11.4	%
Gross income		52.5			69.4			(16.9	)		-24.4	%
% of sales		9.8	%		11.3	%		-150	bps
SG&A expenses		31.5			33.0			(1.5	)		-4.5	%
Amortization		1.6			0.9			0.7			77.8	%
Operating income		19.4			35.5			(16.1	)		-45.4	%
% of sales		3.6	%		5.8	%		-220	bps

Defense segment net sales decreased as a result of lower Family of Heavy Tactical Vehicle and Family of Medium Tactical Vehicle program volume as U.S. government funding for these programs has decreased in recent years.

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The decrease in gross margin in the Defense segment was due to unfavorable product mix (220 basis points) and unfavorable cumulative catch-up adjustments on contracts (80 basis points), offset in part by the absence of inefficiencies associated with the establishment of an additional production line that were incurred during the three months ended March 31, 2021 (120 basis points).

The decrease in operating ~~inefficiencies and charges related to restructuring actions~~income in the ~~access equipment~~Defense segment ~~increased material costs~~was primarily a result of the impact of lower gross margin associated with lower sales volume ($12 million) and ~~adverse~~unfavorable product ~~mix.~~

Inmix ($12 million), offset in part by the ~~first quarter~~absence of ~~2018, charges and operating~~ inefficiencies associated w~~ith restructuring plans~~ with the establishment of an additional production line that were incurred during the three months ended March 31, 2021 ($8 million).

Fire & Emergency

The following table presents the Fire & Emergency segment results (in millions):

	Three Months Ended March 31,
	2022			2021			Change			% Change
Net sales	$	287.9		$	312.5		$	(24.6	)		-7.9	%
Cost of sales		241.0			242.5			(1.5	)		-0.6	%
Gross income		46.9			70.0			(23.1	)		-33.0	%
% of sales		16.3	%		22.4	%		-610	bps
SG&A expenses		24.2			22.2			2.0			9.0	%
Amortization		0.3			0.4			(0.1	)		-25.0	%
Operating income		22.4			47.4			(25.0	)		-52.7	%
% of sales		7.8	%		15.2	%		-740	bps

Fire & Emergency segment net sales decreased due to lower ARFF vehicle volume ($18 million) as a large multi-unit award was recognized in sales during the three months ended March 31, 2021.

The decrease in gross margin in the ~~access equipment~~Fire & Emergency segment ~~were significantly~~was primarily attributable to higher ~~than the Company had expected. The access equipment segment had made significant progress implementing the plan to outsource aftermarket~~material & logistics costs (410 basis points), higher production costs (250 basis points) associated with parts ~~distribution~~shortages and relocate manufacturing in the U.S. and Europe in fiscal 2017. During the first quarter of fiscal 2018, however, the access equipment segment experienced issues that caused operational inefficiencies resulting in additional costs. The Company believes most of the issues have been rectified but still expects that the segment will experience some additional inefficiencies in fiscal 2018. Due to the additional time and effort required to completely transition production and aftermarket warehousing and fulfillment activities, the Company now expects the total project costs will be approximately $73 million, approximately $20 million higher than the Company's previous estimate. The Company continues to expect these actions will result in ongoing savings of $20 million to $25 million per year once fully implemented.

The combined impact of better than expected results in the first quarter of fiscal 2018, the Company's positive outlook for the remainder of the fiscal year, the impact of the new tax legislation in the United Stateslabor challenges, unfavorable product mix (70 basis points) and higher expected costs and inefficiencies related to restructuring actions, led the Company to increase its fiscal 2018 earnings per share estimate range from $4.20 to $4.60 to a range of $4.75 to $5.20 on estimated operating income of $520 million to $570 million. Approximately $0.55 of the increase in earnings per share range is the result of the decrease in the effective tax rate resulting from tax reform in the United States. Excluding expected operating inefficiencies and charges related to announced restructuring actions in the access equipment and commercial segments and the one-time discrete adjustments associated with implementing tax reform, the Company also increased its fiscal 2018 adjusted earnings per share estimate range from $4.25 to $4.65 to a range of $5.00 to $5.45 on estimated adjusted operating income of $550 million to $600 million. Strong order activity in the first quarter of fiscal 2018 in the access equipment segment and a more positive outlook after completion of annual negotiations with the national rental companies during the quarter also resulted in the Company increasing its fiscal 2018 sales estimate range in the access equipment segment by $200 million, resulting in estimated consolidated sales in fiscal 2018 of between $7.1 billion and $7.3 billion.

The Company now expects access equipment segment fiscal 2018 sales to be $3.3 billion to $3.4 billion, compared to the Company's previous expectation of $3.1 billion to $3.2 billion. The revised sales estimate for fiscal 2018 represents an estimated 9% to 12% increase from fiscal 2017 sales. The Company is lowering its fiscal 2018 operating income margin outlook range for the access equipment segment from a range of 10.3% to 10.8% to a range of 9.95% to 10.5%new product development spending (70 basis points), ~~reflecting higher charges and inefficiencies related to restructuring actions and a less favorable mix,~~ offset in part by improved ~~absorption. Excluding expected operating inefficiencies and charges related to restructuring actions, the Company expects adjusted~~pricing (170 basis points).

The decrease in operating income ~~margins~~ in the ~~access equipment~~Fire & Emergency segment ~~in fiscal 2018 will be in the range of 10.75% to 11.25%, up from the Company's previous adjusted operating income margin outlook range for this segment of 10.5% to 11.0%.~~

The Company continues to expect defense segment fiscal 2018 sales to be approximately $1.80 billion to $1.85 billion. The Company is increasing its fiscal 2018 operating income margin estimate range for the defense segment from a range of 9.5% to 9.75% to a range of 9.75% to 10.0%, reflecting the strong performance from this segment in the first quarter of fiscal 2018.

The Company's fiscal 2018 sales expectations for the fire & emergency segment remain unchanged at approximately $1.1 billion. The Company is increasing its fiscal 2018 operating income margin outlook range for the fire & emergency segment from a range of 10.5% to 11.0% to a range of 10.75% to 11.25%, again reflecting the strong performance from this segment in the first quarter of fiscal 2018.

The Company is tightening its fiscal 2018 sales outlook for the commercial segment to approximately $975 million, the high end of the Company's previous range of $950 million to $975 million. Solely aswas largely a result of ~~expected restructuring charges~~higher material & logistics costs ($12 million), the impact of lower gross margin associated with announced restructuring actions, the Company is lowering its expected operating income margins in the commercial segment for fiscal 2018 from a range of 5.75% to 6.25% to a range of 5.35% to 5.85%. Excluding expected restructuring charges, the Company expects adjusted operating income margins in the commercial segment in fiscal 2018 will be in the range of 5.75% to 6.25%lower sales volume ($9 million), ~~consistent with previous estimates.~~

The Company is now estimating that fiscal 2018 corporate expenses will be approximately $155 million compared to the previous expectation of $150 million. The Company now expects its effective tax rate to be approximately 21.8%, down from the Company's previous expected effective tax rate of 30.3%. Excluding the tax impacthigher production costs associated with ~~expected operating inefficiencies~~parts shortages and charges related to announced restructuring actions in the access equipment and commercial segments and the one-time discrete adjustments associated with tax reform, the adjusted effective tax rate estimate is now expected to be approximately 23.0% compared to the Company's previous expectation of 30.5%. The Company continues to expect its estimated share count to be approximately 76 million shares.

The Company expects higher earnings per share in the second quarter of fiscal 2018 as compared to the second quarter of fiscal 2017 on higher sales and operating income in all non-defense segments and a lower tax rate. The Company expects defense segment sales and operating income to be lower as expected higher Joint Light Tactical Vehicle (JLTV) sales will only partially offset lower sales of international Mine Resistant Ambush Protected-All Terrain Vehicles (M-ATV).

~~Results of Operations~~

~~Analysis of Consolidated Net Sales~~

~~The following table presents net sales by business segment (in millions):~~

First Quarter Fiscal
2018 2017
Net sales:
Access equipment $ 628.2
$ 489.2
Defense 493.5
294.5
Fire & emergency 229.1
232.5
Commercial 241.4
199.2
Intersegment eliminations and other (5.9 ) (4.0 )
$ 1,586.3
$ 1,211.4

~~First Quarter Fiscal 2018 Compared to 2017~~

Consolidated net sales increased $374.9 million, or 30.9%, in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017. The Company reported double-digit percentage sales growth in the defense, access equipment and commercial segments.

Access equipment segment net sales increased $139.0 million, or 28.4%, in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017. The increase in sales was primarily due to improved demand for both aerial work platforms and telehandlers.

Defense segment net sales increased $199.0 million, or 67.6%, in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017. The increase in sales was primarily due to the ramp up of sales to the U.S. government under the JLTV program and international M-ATV sales.

Fire & emergency segment net sales decreased $3.4 million, or 1.5%, in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017. The decrease in sales was primarily due to lower airport products international volume (down $17labor challenges ($7 million), offset in part by improved pricing ~~(up $8~~($7 million).

Commercial

The following table presents the Commercial segment results (in millions):

	Three Months Ended March 31,
	2022			2021			Change			% Change
Net sales	$	241.4		$	230.0		$	11.4			5.0	%
Cost of sales		202.5			190.3			12.2			6.4	%
Gross income		38.9			39.7			(0.8	)		-2.0	%
% of sales		16.1	%		17.3	%		-110	bps
SG&A expenses		23.8			20.0			3.8			19.0	%
Amortization		0.8			0.9			(0.1	)		-11.1	%
Operating income (loss)		14.3			18.8			(4.5	)		-23.9	%
% of sales		5.9	%		8.2	%		-230	bps

Commercial segment net sales increased ~~$42.2 million, or 21.2%, in the first quarter~~as a result of ~~fiscal 2018 compared to the first quarter of fiscal 2017. The increase in sales was~~favorable product mix primarily due to ~~higher concrete placement (up $27 million) and refuse collection vehicle (up $9 million) unit volume. Fiscal 2017 first quarter sales were negatively impacted by an atypical order pattern.~~

~~Analysis of Consolidated Cost of Sales~~

~~The following table presents cost of sales by business segment (in millions):~~

First Quarter Fiscal
2018 2017
Cost of sales:
Access equipment $ 551.7
$ 399.5
Defense 407.6
248.9
Fire & emergency 183.8
198.2
Commercial 206.2
169.9
Intersegment eliminations and other (5.2 ) (4.8 )
$ 1,344.1
$ 1,011.7

~~First Quarter Fiscal 2018 Compared to 2017~~

Consolidated cost of sales was $1.34 billion, or 84.7% of sales, in the first quarter of fiscal 2018 compared to $1.01 billion, or 83.5% of sales, in the first quarter of fiscal 2017. The 120 basis point increase in cost of sales as a greater percentage of sales that included a third-party chassis ($13 million) and higher pricing in response to higher input costs ($13 million), offset in part by lower sales volume as a result of supply chain challenges ($15 million).

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The decrease in gross margin in the ~~first quarter of fiscal 2018 compared~~Commercial segment was primarily attributable to ~~the first quarter of fiscal 2017 was largely due to higher~~unfavorable material costs ~~(120 basis points) as well as charges and operating inefficiencies related to restructuring actions in the access equipment and commercial segments (120~~(920 basis points), offset in part by ~~improved manufacturing performance (130 basis points), primarily in the fire & emergency and defense segments.~~

Access equipment segment cost of sales was $551.7 million, or 87.8% of sales, in the first quarter of fiscal 2018 compared to $399.5 million, or 81.7% of sales, in the first quarter of fiscal 2017. The 610 basis point increase in cost of sales as a percentage of sales in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017 was largely due to higher material costs (250 basis points), charges and operating inefficiencies related to restructuring actions (250 basis points), higher legal and inventory reserve adjustments (combined 90 basis points), an adverse foreign exchange impact (60 basis points) and unfavorable customer mix.

Defense segment cost of sales was $407.6 million, or 82.6% of sales, in the first quarter of fiscal 2018 compared to $248.9 million, or 84.5% of sales, in the first quarter of fiscal 2017. The 190 basis point decrease in cost of sales as a percentage of sales in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017 was primarily attributable to improved manufacturing performance (390 basis points) and lower new product development spending on higher sales (100 basis points), offset in part by adversefavorable product mix ~~(310 basis points).~~

Fire & emergency segment cost of sales was $183.8 million, or 80.2% of sales, in the first quarter of fiscal 2018 compared to $198.2 million, or 85.3% of sales, in the first quarter of fiscal 2017. The 510 basis point decrease in cost of sales as a percentage of sales in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017 was primarily attributable to improved pricing (250(430 basis points) and improved ~~manufacturing performance (220~~pricing (390 basis points).

~~Commercial segment cost of sales was $206.2 million, or 85.4% of sales, in the first quarter of fiscal 2018 compared to $169.9 million, or 85.3% of sales, in the first quarter of fiscal 2017.~~

~~Intersegment eliminations and other includes intercompany profit on inter-segment sales not yet sold to third party customers.~~

~~Analysis of Consolidated Operating Income (Loss)~~

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

First Quarter Fiscal
2018 2017
Operating income (loss):
Access equipment $ 13.8
$ 24.4
Defense 65.2
23.8
Fire & emergency 25.1
17.0
Commercial 8.3
4.6
Corporate (38.6 ) (33.6 )
$ 73.8
$ 36.2

~~First Quarter Fiscal 2018 Compared to 2017~~

Consolidated operating income increased 103.9% to $73.8 million, or 4.7% of sales, in the first quarter of fiscal 2018 compared to $36.2 million, or 3.0% of sales, in the first quarter of fiscal 2017. The increase in operating income in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017 was primarily a result of higher gross margin associated with higher sales volume ($90 million), offset in part by charges and operating inefficiencies related to restructuring actions in the access equipment and commercial segments ($19 million), increased material costs ($18 million) and adverse product mix ($13 million).

Access equipment segment operating income decreased 43.4% to $13.8 million, or 2.2% of sales, in the first quarter of fiscal 2018 compared to $24.4 million, or 5.0% of sales, in the first quarter of fiscal 2017.

The decrease in operating income in the ~~first quarter of fiscal 2018 compared to the first quarter of fiscal 2017~~Commercial segment was primarily ~~a result of charges and operating inefficiencies related~~due to ~~restructuring actions ($16 million),~~ higher material costs ($1622 million), ~~higher legal and inventory reserve adjustments ($5 million), unfavorable customer mix and an adverse foreign exchange~~the impact ~~offset in part by higher~~of lower gross margin associated with ~~higher~~lower sales volume ($364 million).

Defense segment operating income increased 173.9% to $65.2 million, or 13.2% of sales, in the first quarter of fiscal 2018 compared to $23.8 million, or 8.1% of sales, in the first quarter of fiscal 2017. The increase in operating income in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017 was largely due to, higher ~~gross margin~~manufacturing costs associated with parts shortages ($2 million), higher ~~sales volume~~operating expenses ($432 million) and ~~improved manufacturing performance~~higher litigation costs ($121 million), offset in part by ~~adverse~~favorable product mix ($14 million) and improved pricing ($13 million).

Corporate and Intersegment Eliminations

The following table presents the corporate costs and intersegment eliminations (in millions):

	Three Months Ended March 31,
	2022			2021			Change			% Change
Net sales	$	(2.3	)	$	(6.4	)	$	4.1			-64.1	%
Cost of sales		0.5			(7.5	)		8.0			-106.7	%
Gross income		(2.8	)		1.1			(3.9	)		-354.5	%
Operating expenses		31.5			42.5			(11.0	)		-25.9	%
Operating income		(34.3	)		(41.4	)		7.1			-17.1	%

~~Fire & emergency segment~~

Corporate operating income increased 47.6% to $25.1 million, or 11.0% of sales, in the first quarter of fiscal 2018 compared to $17.0 million, or 7.3% of sales, in the first quarter of fiscal 2017. The increase in operating income in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017 wasexpenses decreased primarily as a result of ~~improved pricing~~lower incentive compensation costs ($86 million), lower healthcare costs ($4 million) and ~~improved manufacturing performance~~lower share-based compensation costs ($53 million), offset in part by ~~higher selling, general and administrative expenses ($3 million).~~

~~Commercial segment operating income increased 80.4% to $8.3 million, or 3.4% of sales,~~costs associated with the change in the ~~first quarter of~~Company’s fiscal 2018 compared to $4.6 million, or 2.3% of sales, in the first quarter of fiscal 2017. The increase in operating income in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017 was primarily a result of higher gross margin associated with higher sales volumeyear end ($82 million)~~, offset in part by restructuring charges of $2.5 million.~~

Corporate operating costs increased $5.0 million to $38.6 million in the first quarter of fiscal 2018 compared to $33.6 million in the first quarter of fiscal 2017. The increase in corporate operating costs in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017 was primarily due to higher new product development spending ($1 million), increased share-based compensation expense ($1 million) and the timing of costs.

Consolidated selling, general and administrative expenses increased 4.5% to $157.8 million, or 9.9% of sales, in the first quarter of fiscal 2018 compared to $151.0 million, or 12.5% of sales, in the first quarter of fiscal 2017. The increase in consolidated selling, general and administrative expenses in the first quarter of fiscal 2018 compared to the first quarter of fiscal 2017 was generally a result of higher salaries and fringe benefit costs.

~~Analysis of Non-Operating Income Statement Items~~

~~First Quarter Fiscal 2018 Compared to 2017~~

~~Interest expense net of interest income decreased $0.2 million to $13.7 million in the first quarter of fiscal 2018 compared to $13.9 million in the first quarter of fiscal 2017.~~

Other miscellaneous income of $0.5 million in the first quarter of fiscal 2018 and $1.3 million in the first quarter of fiscal 2017 primarily related to net foreign currency transaction gains and losses.

The Company recorded income tax expense of $4.7 million in the first quarter of fiscal 2018, or 7.8% of pre-tax income, compared to $5.2 million, or 21.8% of pre-tax income, in the first quarter of fiscal 2017. Results for the first quarter of fiscal 2018 were favorably impacted by discrete tax benefits of $10.3 million, primarily due to favorable share-based compensation tax benefits of $3.3 million and a $6.5 million net benefit related to the implementation of new tax legislation in the United States. Results for the first quarter of fiscal 2017 were favorably impacted by $2.8 million of discrete tax benefits, largely related to state tax matters.

in first quarter of fiscal 2018. Both of the tax benefit and the tax charge represent provisional amounts and the Company's current best estimates. Any adjustments recorded to the provisional amounts through the first quarter of fiscal 2019 will be included in income from operations as an adjustment to tax expense. The provisional amounts incorporate assumptions made based upon the Company’s current interpretation of the Tax Reform Act and may change as the Company receives additional clarification and implementation guidance. As a result of tax reform, the Company anticipates that its effective tax rate, prior to discrete tax benefits, will be approximately 24.5% in fiscal 2018. Longer term, once the full effect of the lower statutory tax rate begins to impact the Company, the Company anticipates that its effective tax rate, prior to discrete tax benefits, will range between 22% and 24%. ~~This estimate reflects the repeal of the deduction for domestic production activities and other items of the Tax Reform Act that are less beneficial.~~

Equity in earnings of unconsolidated affiliates of $0.5 million in the first quarter of fiscal 2018 and $0.8 million in the first quarter of fiscal 2017 primarily represented the Company’s equity interest in a commercial entity in Mexico and a joint venture in Europe.

Liquidity and Capital Resources

The Company generates significant capital resources from operating activities, which is the expected primary source of funding for ~~its operations. Other~~the Company. In addition to cash generated from operations, the Company had other sources of liquidity ~~are~~ available ~~under the Revolving Credit Facility (as defined in “Liquidity”) and available cash and cash equivalents. At December~~at March 31, ~~2017, the Company had~~2022, including $944.5 million of cash and cash equivalents ~~of $379.1 million. In addition to cash~~ and ~~cash equivalents, the Company had $755.1~~$1,081.4 million of unused available capacity under the Revolving Credit Facility ~~as of December 31, 2017.~~(as defined in “Liquidity”). Borrowings under the Revolving Credit Facility could, as discussed below, be limited by ~~the~~a financial ~~covenants~~covenant contained in the Credit Agreement (as defined in “Liquidity”). ~~These sources of~~The Company was in compliance with the financial covenant at March 31, 2022 and expects to remain in compliance with the financial covenant contained in the Credit Agreement for the foreseeable future.

The Company continues to actively monitor its liquidity ~~are needed to fund the Company's~~position and working capital ~~requirements, debt service requirements,~~needs and prioritizes capital expenditures ~~dividends~~related to capacity and ~~share repurchases.~~strategic investments. The Company ~~expects~~remains in a stable overall capital resources and liquidity position that the Company believes is adequate to meet its ~~fiscal 2018 U.S. funding needs without repatriating undistributed profits that are indefinitely reinvested outside the United States.~~

projected needs. During the ~~first~~ three months ~~of fiscal 2018,~~ended March 31, 2022, the Company repurchased ~~748,000~~$85 million in shares of its Common ~~Stock, under a repurchase authorization approved by the Company's Board of Directors in August 2015, at a cost of $63.7 million.~~Stock. As of ~~December~~March 31, ~~2017,~~2022, the Company had approximately ~~6.8~~4.4 million shares of Common Stock remaining under ~~this~~its repurchase authorization.

The Company now expects to generate approximately $500 million of cash flow from operations in fiscal 2018, an increase from the Company's previous estimate of $450 million. The increase primarily reflects lower expected estimated tax payments as a result of tax reform in the United States. The Company expects fiscal 2018 capital spending to be approximately $100 million. This estimate does not include any capital associated with the potential construction of a new global headquarters building. If the Company proceeds with a new global headquarters building, the Company believes any related additional capital spending in fiscal 2018 would not have a significant impact on the Company's liquidity. The Company expects to have sufficient liquidity to finance its operations over the next twelve months.

Financial Condition at ~~December~~March 31, ~~2017~~

2022

The Company’s capitalization was as follows (in millions):

	March 31, 2022			December 31, 2021
Cash and cash equivalents	$	944.5		$	995.7
Total debt		594.4			819.0
Total shareholders’ equity		2,968.0			3,076.4
Total capitalization (debt plus equity)		3,562.4			3,895.4
Debt to total capitalization		16.7	%		21.0	%

December 31, September 30,
2017 2017
Cash and cash equivalents $ 379.1
$ 447.0
Total debt 833.1
830.9
Total shareholders’ equity 2,293.4
2,307.4
Total capitalization (debt plus equity) 3,126.5
3,138.3
Debt to total capitalization 26.6 % 26.5 %

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The ~~Company's~~Company’s ratio of debt to total capitalization of ~~26.6%~~16.7% at ~~December~~March 31, ~~2017~~2022 remained within its targeted range. The Company’s goal is to maintain an investment-grade credit rating. The rating agencies periodically update the Company’s credit ratings as events or changes in economic conditions occur. At March 31, 2022, the long-term credit ratings assigned to the Company’s senior debt securities by the credit rating agencies engaged by the Company were as follows:

Rating Agency		Rating
Fitch Ratings		BBB-
Moody’s Investor Services, Inc.		Baa3
Standards & Poor’s		BBB

Consolidated days sales outstanding (defined as “Trade Receivables” at quarter end divided by “Net Sales” for the most recent quarter multiplied by 90 days) ~~increased~~decreased from ~~56 days at September 30, 2017 to 65~~46 days at December 31, ~~2017 primarily as a result of timing of payment on a large international order within the defense segment. Days~~2021 to 42 days at March 31, 2022. Likewise, days sales outstanding for segments other than the ~~defense~~Defense segment decreased ~~slightly~~ from ~~52 days at September 30, 2017 to 50~~53 days at December 31, ~~2017.~~2021 to 51 days at March 31, 2022. Consolidated inventory turns (defined as “Cost of Sales” on an annualized basis, divided by the average “Inventory” at the past five quarter end periods) ~~decreased slightly~~increased from ~~4.5 times at September 30, 2017 to 4.1~~4.9 times at December 31, ~~2017.~~

2021 to 5.1 times at March 31, 2022.

Cash Flows

Operating Cash Flows

Operating activities generated ~~$29.2~~$328.9 million of cash in the first three months of fiscal ~~2018~~2022 compared to ~~$83.8~~$326.8 million during the three months ended March 31, 2021. Lower net income during the first three months of fiscal 2022 was almost completely offset by improved working capital as a result of an increase in days payable outstanding. The Company expects to generate approximately $725 million of cash flows from operations in fiscal 2022.

Investing Cash Flows

Investing activities used cash of $40.1 million in the first three months of fiscal ~~2017. The decline in operating cash flow in~~2022 compared to $122.3 million during the ~~first~~ three months ended March 31, 2021. The Company used available cash to fund the acquisition of ~~fiscal 2018 as compared to~~Pratt Miller during the ~~first~~ three months ended March 31, 2021. Through March 31, 2022, the Company utilized $26.1 million for capital expenditures. The Company anticipates that it will spend $300 million on capital expenditures in fiscal 2022. The expected increase in capital spending in fiscal 2022 reflects the set-up of ~~fiscal 2017 was primarily~~ the ~~result of timing of payments on an international defense contract.~~

~~Investing~~manufacturing plant in Spartanburg, SC, to produce Next Generation Delivery Vehicles (NGDV) for the USPS for which the Company will largely receive customer advances.

Financing Cash Flows

~~Investing~~

Financing activities used cash of ~~$18.2~~$337.9 million in the first three months of fiscal ~~2018~~2022 compared to ~~$22.0~~$5.7 million induring the ~~first~~ three months ended March 31, 2021. The increase in cash utilized for financing activities was due to the repayment of ~~fiscal 2017. Capital spending, excluding equipment held for rental, of $18.7~~the Company’s $225 million ~~in the first three months of fiscal 2018 reflected~~term loan and an increase in Common Stock repurchases under the authorization approved by the Company’s Board of ~~$4.5 million compared to capital spending in the first three months of fiscal 2017.~~

~~Financing Cash Flows~~

~~Financing activities used cash of $79.0 million in the first three months of fiscal 2018 compared to $12.4 million in the first three months of fiscal 2017.~~Directors. In the first three months of fiscal ~~2018,~~2022, the Company repurchased ~~748,000~~751,309 shares of its Common Stock at an aggregate cost of ~~$63.7 million under the repurchase authorization approved by the Company's Board of Directors.~~$85.0 million. The Company did not repurchase any shares of its Common Stock ~~under this authorization during~~in the ~~first~~ three months ended March 31, 2021.

Table of ~~fiscal 2017.~~

Contents

Liquidity

Senior ~~Secured~~ Credit Agreement

On March ~~2014,~~23, 2022, the Company entered into ana Third Amended and Restated Credit Agreement ~~with various lenders~~ (the “Credit Agreement”). The Credit Agreement provides for ~~(i) a~~an unsecured revolving credit facility ~~(Revolving~~(the “Revolving Credit ~~Facility)~~Facility”) that matures in March ~~2019~~2027 with an initial maximum aggregate amount of availability of $600 million and (ii) a $400 million term loan due in quarterly principal installments of $5 million with a balloon payment of $310 million due at maturity in March 2019. In January 2015, the Revolving Credit Facility was increased to an aggregate maximum amount of $850 million. Refer to Note 7 of the Notes to Condensed Consolidated Financial Statements for additional information regarding the Credit Agreement.

$1.1 billion.

Borrowings under the Credit Agreement bear interest at a variable rate equal to (i) LIBOR plus a specified margin, which may be adjusted upward or downward depending on whether certain criteria are satisfied, or (ii) for dollar-denominated loans only, the base rate (which is the highest of (a) the administrative agent's prime rate, (b) the federal funds rate plus 0.50% or (c) the sum of 1% plus one-month LIBOR) plus a specified margin, which may be adjusted upward or downward depending on whether certain criteria are satisfied.

Covenant Compliance

~~The Credit Agreement contains~~a restriction on the ~~following financial covenants:~~

~~Leverage Ratio: A maximum leverage ratio (defined as, with certain adjustments, the ratio~~disposition of all or substantially all of the ~~Company’s consolidated indebtedness to consolidated net income before interest, taxes, depreciation, amortization, non-cash charges and certain other items (EBITDA)) as~~assets of the ~~last day of any fiscal quarter of 4.50 to 1.0.~~

~~Interest Coverage Ratio: A minimum interest coverage ratio (defined~~Company and its subsidiaries taken as ~~with certain adjustments, the ratio of the Company’s consolidated EBITDA to the Company’s consolidated cash interest expense) as of the last day of any fiscal quarter of 2.50 to 1.0.~~

Senior Secured Leverage Ratio: A maximum senior secured leverage ratio (defined as, with certain adjustments, the ratio of the Company’s consolidated secured indebtedness to the Company’s consolidated EBITDA) of 3.00 to 1.0.

With certain exceptions, the Company may elect to have the collateral pledged in connection with the Credit Agreement released during any period that the Company maintains an investment grade corporate family rating from either S&P Global Ratings or Moody’s Investor Service. During any such period when the collateral has been released, the Company’s leverage ratio as of the last day of any fiscal quarter must not be greater than 3.75 to 1.0, and the Company would not be subject to any additional requirement to limit its senior secured leverage ratio.

a whole. The Company was in compliance with the financial ~~covenants~~covenant contained in the Credit Agreement as of ~~December~~March 31, ~~2017~~2022 and expects to be able to meet the financial ~~covenants~~covenant contained in the Credit Agreement over the next twelve months.


i.	50% of the consolidated net income of the Company and its subsidiaries (or if such consolidated net income is a deficit, minus 100% of such deficit), accrued on a cumulative basis during the period beginning on January 1, 2010 and ending on the last day of the fiscal quarter immediately preceding the date of the applicable proposed dividend or distribution; and


~~ii.~~	~~100% of the aggregate net proceeds received by the Company subsequent to March 3, 2010 either as a contribution to its common equity capital or from the issuance and sale of its Common Stock.~~

Senior Notes

In ~~February 2014,~~May 2018, the Company issued ~~$250.0~~$300.0 million of ~~5.375%~~4.600% unsecured senior notes due May 15, 2028 (the “2028 Senior Notes”). In February 2020, the Company issued $300.0 million of 3.100% unsecured senior notes due March 1, ~~2022~~2030 (the ~~“2022~~“2030 Senior Notes”)~~. In March 2015,~~ at a discount of $1.2 million. The 2028 Senior Notes and the 2030 Senior Notes were issued pursuant to an indenture (the “Indenture”) between the Company ~~issued $250.0 million of 5.375% unsecured senior notes due March 1, 2025 (the “2025 Senior Notes”).~~and a trustee. The ~~proceeds of both note issuances were used to repay existing outstanding notes of the Company.~~Indenture contains customary affirmative and negative covenants. The Company has the option to redeem the ~~2022~~2028 Senior Notes and ~~the 2025~~2030 Senior Notes at any time for a ~~premium after March 1, 2017 and March 1, 2020, respectively.~~

The 2022 Senior Notes and the 2025 Senior Notes were issued pursuant to separate indentures (the “Indentures”) among the Company, the subsidiary guarantors named therein and a trustee. The Indentures contain customary affirmative and negative covenants. Certain of the Company’s subsidiaries jointly, severally, fully and unconditionally guarantee the Company’s obligations under the 2022 Senior Notes and 2025 Senior Notes. See Note 20 of the Notes to Condensed Consolidated Financial Statements for separate financial information of the subsidiary guarantors.

premium.

Refer to Note ~~7 of the Notes~~11 to Condensed Consolidated Financial Statements for additional information regarding the Company’s ~~outstanding~~ debt as of ~~December~~March 31, ~~2017.~~

~~Contractual Obligations, Commercial Commitments and Off-Balance Sheet Arrangements~~

The Company's contractual obligations, commercial commitments and off-balance sheet arrangement disclosures in its Annual Report on Form 10-K for the year ended September 30, 2017 have not materially changed since that report was filed.

2022.

Application of Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires the Company to make judgments, assumptions and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. The ~~Company's disclosures of critical~~ accounting policies that the Company believes are most critical to the portrayal of its financial condition and results of operations are reported in ~~its~~Item 7 of the Company’s Annual Report on Form 10-K for the year ended September 30, ~~2017 have not materially changed since that report was filed.~~

2021.

Critical Accounting Estimates

The ~~Company's~~Company’s disclosures of critical accounting estimates in its Annual Report on Form 10-K for the year ended September 30, ~~2017~~2021 have not materially changed since that report was filed.

New Accounting Standards

~~Refer to Note 2~~

There are no significant impacts of ~~the Notes to Condensed Consolidated Financial Statements for a discussion of the impact~~new accounting standards on the Company’s Condensed Consolidated Financial ~~Statements~~Statements.

Table of ~~new accounting standards.~~

Contents

Customers and Backlog

Sales to the U.S. government comprised approximately ~~26%~~27% of the Company’s net sales in the ~~first~~ three months ~~of fiscal 2018.~~ended March 31, 2022. No other single customer accounted for more than 10% of the Company’s net sales for this period. A ~~significant portion~~substantial majority of the Company’s net sales are derived from the fulfillment of customer orders that are received prior to commencing production.

The Company’s backlog at ~~December~~March 31, ~~2017~~2022 increased ~~21.0%~~88.4% to ~~$4.79~~$12.70 billion compared to $6.74 billion at March 31, 2021. Access Equipment segment backlog increased 160.5% to $3.96 billion at ~~December~~March 31, ~~2016. Access equipment~~2022 compared to $1.52 billion at March 31, 2021 as the re-opening of economies coming out of the pandemic and elevated customer fleet ages drove higher demand. Defense segment backlog increased ~~165.3%~~76.6% to ~~$1.58~~$6.19 billion at ~~December~~March 31, ~~2017~~2022 compared to ~~$594.3~~$3.50 billion at March 31, 2021 primarily due to the initial vehicle order from the USPS for the NGDV program. Fire & Emergency segment backlog increased 51.8% to $1.92 billion at March 31, 2022 compared to $1.27 billion at March 31, 2021 due to strong demand for fire trucks coming out of the COVID-19 pandemic. Although Fire & Emergency segment backlog remained strong, orders softened for ARFF vehicles due to the adverse impact of the COVID-19 pandemic on airport budgets. Commercial segment backlog increased 40.1% to $630.1 million at ~~December~~March 31, ~~2016 primarily~~2022 compared to $449.7 million at March 31, 2021 due to improved market conditions. The Company believes that improved rental market conditions have resulted in customers having greater confidence to place larger annual orders in fiscal 2018. The Company believes that in the past few fiscal years, some customers executed a more just-in time approach to orders due to their cautious view of the economy and the rental market. Defense segment backlog decreased 16.7% to $1.85 billion at December 31, 2017 compared to $2.23 billion at December 31, 2016 primarily due to performance on the large international contract for the delivery of M-ATVs. Fire & emergency segment backlog increased 9.3% to $985.1 million at December 31, 2017 compared to $901.1 million at December 31, 2016 due largely to improved demand for Pierce fire apparatus. Commercial segment backlog increased 57.5% to $373.9 million at December 31, 2017 compared to $237.4 million at December 31, 2016. Unit backlog for concrete mixers as of December 31, 2017 was up 23.5% due to a return to a more normal ordering pattern as compared to the atypical order pattern experienced in the prior year. Unit backlog for refuse collection vehicles as demand rebounded following the re-opening of ~~December 31, 2017 was up 99.9% compared~~economies and high demand for the Company’s new front-discharge concrete mixer. Global supply chain challenges and the associated delays in production are also leading to ~~September 30, 2016 due to improved market conditions.~~

higher backlogs in the Company’s Access Equipment, Fire & Emergency and Commercial segments.

Reported backlog excludes purchase options and announced orders for which definitive contracts have not been executed. 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 ~~U.S. government~~DoD versus its sales to other customers. Approximately ~~15%~~52% of the Company’s ~~December~~March 31, ~~2017~~2022 backlog is not expected to be filled in fiscal ~~2018.~~

2022.

Non-GAAP Financial Measures

The Company is forecasting ~~operating income and~~ earnings per share excluding items that affect comparability. When the Company forecasts ~~operating income and~~ earnings per share, excluding items, these are considered non-GAAP financial measures. The Company believes excluding the impact of these items is useful to investors to allow a more accurate comparison of the ~~Company's~~Company’s operating performance to prior year results. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the ~~Company's~~Company’s results prepared in accordance with GAAP.

The table below presents a reconciliation of the ~~Company's~~Company’s presented GAAP measures to the most directly comparable non-GAAP ~~measures (in millions, except per share amounts):~~measures:

	Fiscal 2022 Expectations
	Low		High
Earnings per share-diluted (GAAP)	$	4.75	$	5.75
Charge for anti-hybrid tax on prior period income		0.25		0.25
Adjusted earnings per share-diluted (non-GAAP)	$	5.00	$	6.00

Fiscal 2018 Expectations
Low High

Access equipment segment operating income margin (GAAP) 9.95 % 10.50 %
Cost and inefficiencies related to restructuring actions 0.80 % 0.75 %
Adjusted access equipment segment operating income margin (non-GAAP) 10.75 % 11.25 %

Commercial segment operating income margin (GAAP) 5.35 % 5.85 %
Restructuring-related costs 0.40 % 0.40 %
Adjusted commercial segment operating income margin (non-GAAP) 5.75 % 6.25 %

Consolidated operating income (GAAP) $ 520.0
$ 570.0
Cost and inefficiencies related to restructuring actions 30.0
30.0
Adjusted consolidated operating income (non-GAAP) $ 550.0
$ 600.0

Effective income tax rate (GAAP) 21.8 % 21.8 %
Impact of costs and inefficiencies related to restructuring actions on the effective income tax rate (0.1 )% (0.1 )%
Revaluation of net deferred tax liabilities 5.1 % 4.7 %
Repatriation tax (3.8 )% (3.4 )%
Adjusted effective income tax rate (non-GAAP) 23.0 % 23.0 %

Earnings per share-diluted (GAAP) $ 4.75
$ 5.20
Cost and inefficiencies related to restructuring actions, net of tax 0.33
0.33
Revaluation of net deferred tax liabilities (0.31 ) (0.31 )
Repatriation tax 0.23
0.23
Adjusted earnings per share-diluted (non-GAAP) $ 5.00
$ 5.45

~~ITEM 3.~~

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The ~~Company's~~Company’s quantitative and qualitative disclosures about market risk for changes in interest rates and commodity risk, which are incorporated by reference to Item 7A of the ~~Company's~~Company’s Annual Report on Form 10-K for the year ended September 30, ~~2017,~~2021, have not materially changed since that report was filed.

Table of Contents

~~ITEM 4.~~

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. In accordance with Rule 13a-15(b) of the Exchange Act, the Company’s management evaluated, with the participation of the Company’s President and Chief Executive Officer and Executive Vice President and Chief Financial Officer, the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of ~~the end of the quarter ended December~~March 31, ~~2017.~~2022. Based upon their evaluation of these disclosure controls and procedures, the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of ~~the end of the quarter ended December~~March 31, ~~2017~~2022 to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission rules and forms, and to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting. There were no changes in the ~~Company's~~Company’s internal control over financial reporting that occurred during the ~~quarter~~three months ended ~~December~~March 31, ~~2017~~2022 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Table of Contents

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

None.

~~ITEM 1. LEGAL PROCEEDINGS~~

~~None.~~

~~ITEM 1A.RISK FACTORS~~

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, which may cause actual performance to differ materially from historical or projected future performance. In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Item 1A. of our Annual Report on Form 10-K for the year ended September 30, ~~2017,~~2021, which have not materially changed.

~~ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Common Stock Repurchases

The following table sets forth information with respect to purchases of Common Stock made by the Company or on the ~~Company's~~Company’s behalf during the ~~first quarter of fiscal 2018:~~three months ended March 31, 2022:

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ⁽¹⁾		Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs ⁽¹⁾
January 1 - January 31		251,991	$	119.07		251,991		4,916,572
February 1 - February 28		221,116	$	113.08		221,116		4,695,456
March 1 - March 31		278,202	$	107.85		278,202		4,417,254
Total		751,309				751,309		4,417,254

Period

Total Number of
Shares
Purchased

Average Price
Paid per Share

Total Number of
Shares
Purchased as
Part of Publicly
Announced Plans or
Programs (1)

Maximum Number of
Shares that May
Yet Be Purchased
Under the Plans or
Programs (1)
October 1 - October 31 —
—
—
7,512,574
November 1 - November 30 748,000
$ 85.19
748,000
6,764,574
December 1 - December 31 —
—
—
6,764,574
Total 748,000
748,000
6,764,574

⁽¹⁾

~~(1)~~

~~On August 31, 2015,~~

In May 2019, the ~~Company's~~Company’s Board of Directors ~~increased the Company's authorization to repurchase shares of the Company's~~approved a Common Stock byrepurchase authorization of 10,000,000 ~~shares, taking the authorized number of shares of Common Stock available for repurchase to 10,299,198 as of that date. As of December 31, 2017, the~~shares. The Company ~~had~~ repurchased ~~3,534,624~~751,309 shares of Common Stock under this ~~authorization.~~authorization during the three months ended March 31, 2022 at a cost of $85.0 million. As ~~a result, 6,764,574~~of March 31, 2022, the Company has remaining authority to repurchase 4,417,254 shares of Common ~~Stock remained available for repurchase under the repurchase authorization at December 31, 2017.~~Stock. The Company can use this authorization at any time as there is no expiration date associated with the authorization. From time to time, the Company may enter into a Rule 10b5-1 trading plan for the purpose of repurchasing shares under this authorization. ~~The Company did not repurchase any shares of the Company's Common Stock under this authorization during the first quarter of fiscal 2017.~~

The Company intends 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 and cash flows, capital requirements, the Company’s general financial condition, general business conditions and other factors. ~~In addition, the Company's credit agreement limits the amount of dividends and other distributions, including repurchases of shares of Common Stock, the Company may pay on or after March3, 2010 to (i)~~50% of the consolidated net income of the Company and its subsidiaries (or if such consolidated net income is a deficit, minus 100% of such deficit), accrued on a cumulative basis during the period beginning on January~~1, 2010 and ending on the last day of the fiscal quarter immediately preceding the date of the applicable proposed dividend or distribution; plus (ii)~~100% of the aggregate net proceeds received by the Company subsequent to March 3, 2010 either as a contribution to its common equity capital or from the issuance and sale of its Common Stock. The Company's indentures for its senior notes due 2022 and senior notes due 2025 also contain restrictive covenants that may limit the Company's ability to repurchase shares of its Common Stock or make dividends and other types of distributions to shareholders.

~~ITEM 4.MINE SAFETY DISCLOSURES~~

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

Table of Contents

~~ITEM 6. EXHIBITS~~

~~Exhibit No.Description~~

ITEM 6.

EXHIBITS


~~31.1~~
Exhibit No.	Description

4.1	Third Amended and Restated Credit Agreement, dated as of March 23, 2022, among Oshkosh Corporation, the various lenders and issuers party thereto, and Bank of America, N.A., as administrative agent (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated March 23, 2022 (File No. 1-31371).

10.1	Form of Key Executive Employment and Severance Agreement between Oshkosh Corporation and Jay Iyengar (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 (File No. 1-31371)).*

10.2	Framework for Awards of Performance Shares based on ESG/DEI under the Oshkosh Corporation 2017 Incentive Stock and Awards Plan.*

10.3	Framework for Awards of Performance Shares based on Return on Invested Capital under the Oshkosh Corporation 2017 Incentive Stock and Awards Plan.*

31.1	Certification by the President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act, dated ~~January 25, 2018.~~April 27, 2022.


~~31.2~~
31.2	Certification by the Executive Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act, dated ~~January 25, 2018.~~April 27, 2022.


~~32.1~~
32.1	Written Statement of the President and Chief Executive Officer, pursuant to 18 U.S.C. §1350, dated ~~January 25, 2018.~~April 27, 2022.


~~32.2~~
32.2	Written Statement of the Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C. §1350, dated ~~January 25, 2018.~~April 27, 2022.

101.INS	The instance document does not appear in the interactive data file because its XBRL (Extensible Business Reporting Language) tags are embedded within the Inline XBRL document.

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* Denotes a management contract or compensatory plan or arrangement.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		OSHKOSH CORPORATION

		~~OSHKOSH CORPORATION~~
April 27, 2022	By		/s/ John C. Pfeifer
~~January 25, 2018~~	By	~~/s/ Wilson R. Jones~~
		~~Wilson R. Jones,~~ John C. Pfeifer, President and Chief Executive Officer (Principal Executive Officer)

~~January 25, 2018~~	By	~~/s/ David M. Sagehorn~~
April 27, 2022	By	~~David M. Sagehorn,~~ /s/ Michael E. Pack
		Michael E. Pack, Executive Vice President and Chief Financial Officer (Principal Financial Officer)

~~January 25, 2018~~	By
April 27, 2022	By	/s/ James C. Freeders
		James C. Freeders, Senior Vice President Finance and Controller (Principal Accounting Officer)


Wisconsin		39-0520270
~~Wisconsin~~		~~39-0520270~~
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1917 Four Wheel Drive Oshkosh, Wisconsin		54902

~~P.O.Box 2566~~ ~~Oshkosh, Wisconsin~~		~~54903-2566~~
(Address of principal executive offices)		(Zip Code)

☒
ý	QUARTERLY REPORT PURSUANT TO SECTION13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934

☐
o	TRANSITION REPORT PURSUANT TO SECTION13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934



	Three Months Ended December 31,
	2017			2016
Net sales	$	1,586.3		$	1,211.4
Cost of sales	1,344.1			1,011.7
Gross income	242.2			199.7

Operating expenses:
Selling, general and administrative	157.8			151.0
Amortization of purchased intangibles	10.6			12.5
Total operating expenses	168.4			163.5
Operating income	73.8			36.2

Other income (expense):
Interest expense	(15.4		)	(14.7		)
Interest income	1.7			0.8
Miscellaneous, net	0.5			1.3
Income before income taxes and equity in earnings of unconsolidated affiliates	60.6			23.6
Provision for income taxes	4.7			5.2
Income before equity in earnings of unconsolidated affiliates	55.9			18.4
Equity in earnings of unconsolidated affiliates	0.5			0.8
Net income	$	56.4		$	19.2

Earnings per share attributable to common shareholders:
Basic	$	0.75		$	0.26
Diluted	0.74			0.26

Cash dividends declared per share on Common Stock	$	0.24		$	0.21



	December 31,			September 30,
	2017			2017
Assets
Current assets:
Cash and cash equivalents	$	379.1		$	447.0
Receivables, net	1,229.4			1,306.3
Inventories, net	1,219.9			1,198.4
Other current assets	88.2			88.1
Total current assets	2,916.6			3,039.8
Property, plant and equipment, net	458.0			469.9
Goodwill	1,015.8			1,013.0
Purchased intangible assets, net	497.3			507.8
Other long-term assets	74.4			68.4
Total assets	$	4,962.1		$	5,098.9

Liabilities and Shareholders' Equity
Current liabilities:
Revolving credit facilities and current maturities of long-term debt	$	29.7		$	23.0
Accounts payable	554.8			651.0
Customer advances	551.3			513.4
Payroll-related obligations	129.6			191.8
Other current liabilities	300.0			303.9
Total current liabilities	1,565.4			1,683.1
Long-term debt, less current maturities	803.4			807.9
Other long-term liabilities	299.9			300.5
Commitments and contingencies
Shareholders' equity:
Preferred Stock ($.01 par value; 2,000,000 shares authorized; none issued and outstanding)	—			—
Common Stock ($.01 par value; 300,000,000 shares authorized; 92,101,465 shares issued)	0.9			0.9
Additional paid-in capital	799.3			802.2
Retained earnings	2,438.2			2,399.8
Accumulated other comprehensive loss	(122.4		)	(125.0		)
Common Stock in treasury, at cost (17,477,614 and 17,088,224 shares, respectively)	(822.6		)	(770.5		)
Total shareholders’ equity	2,293.4			2,307.4
Total liabilities and shareholders' equity	$	4,962.1		$	5,098.9



	Finance Receivables						Notes Receivable
	December 31, 2017			September 30, 2017			December 31, 2017			September 30, 2017
Aging of receivables that are past due:
Greater than 30 days and less than 60 days	$	—		$	—		$	—		$	—
Greater than 60 days and less than 90 days	—			—			—			—
Greater than 90 days	2.1			2.1			0.2			0.2

Receivables on nonaccrual status	3.6			3.7			20.1			21.3
Receivables past due 90 days or more and still accruing	—			—			—			—

Receivables subject to general reserves	1.8			2.1			—			—
Allowance for doubtful accounts	(0.1		)	—			—			—
Receivables subject to specific reserves	12.1			3.7			24.8			34.2
Allowance for doubtful accounts	(1.4		)	(1.5		)	(6.1		)	(10.0		)



	Three Months Ended December 31, 2017											Three Months Ended December 31, 2016
	Finance		Notes			Trade and Other			Total			Finance		Notes			Trade and Other			Total
Allowance for doubtful accounts at beginning of period	$	1.5	$	10.0		$	6.8		$	18.3		$	1.0	$	13.0		$	7.2		$	21.2
Provision for doubtful accounts, net of recoveries	—		(4.0		)	0.2			(3.8		)	1.1		(0.6		)	(0.5		)	—
Charge-off of accounts	—		—			(0.1		)	(0.1		)	—		(0.1		)	(0.2		)	(0.3		)
Foreign currency translation	—		0.1			—			0.1			—		(0.7		)	—			(0.7		)
Allowance for doubtful accounts at end of period	$	1.5	$	6.1		$	6.9		$	14.5		$	2.1	$	11.6		$	6.5		$	20.2



	December 31, 2017
	Weighted- Average Life (in years)	Gross		Accumulated Amortization			Net
Amortizable intangible assets:
Distribution network	39.1	$	55.4	$	(29.8	)	$	25.6
Technology-related	11.9	104.7		(101.2		)	3.5
Customer relationships	12.8	555.0		(476.3		)	78.7
Other	16.4	16.5		(14.8		)	1.7
	14.4	731.6		(622.1		)	109.5
Non-amortizable trade names		387.8		—			387.8
		$	1,119.4	$	(622.1	)	$	497.3



	Cost of Sales		Selling, General and Administrative Expenses		Total
Access equipment	$	3.3	$	—	$	3.3
Commercial	0.6		1.9		2.5
Total	$	3.9	$	1.9	$	5.8



	Employee Severance and Termination Benefits			Property, Plant and Equipment Impairment			Other Costs			Total
Balance at September 30, 2017	$	19.8		$	—		$	1.0		$	20.8
Restructuring provision	3.7			1.0			1.1			5.8
Utilized - cash	(7.0		)	—			(1.0		)	(8.0		)
Utilized - noncash	—			(1.0		)	—			(1.0		)
Foreign currency translation	0.3			—			—			0.3
Balance at December 31, 2017	$	16.8		$	—		$	1.1		$	17.9



	Employee Severance and Termination Benefits
Balance at September 30, 2016	$	0.9
Restructuring provision	1.1
Utilized - cash	(0.3		)
Balance at December 31, 2016	$	1.7



	Three Months Ended December 31, 2017
	Employee Pension and Postretirement Benefits, Net of Tax			Cumulative Translation Adjustments			Derivative Instruments			Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period	$	(46.2	)	$	(78.6	)	$	(0.2	)	$	(125.0	)
Other comprehensive income (loss) before reclassifications	—			2.1			—			2.1
Amounts reclassified from accumulated other comprehensive income (loss)	0.5			—			—			0.5
Net current period other comprehensive income (loss)	0.5			2.1			—			2.6
Balance at end of period	$	(45.7	)	$	(76.5	)	$	(0.2	)	$	(122.4	)



	Three Months Ended December 31,
	2017								2016
	External Customers		Inter- segment			Net Sales			External Customers		Inter- segment			Net Sales
Access equipment
Aerial work platforms	$	323.5	$	—		$	323.5		$	233.7	$	—		$	233.7
Telehandlers	129.5		—			129.5			93.3		—			93.3
Other	175.2		—			175.2			162.2		—			162.2
Total access equipment	628.2		—			628.2			489.2		—			489.2

Defense	493.2		0.3			493.5			294.2		0.3			294.5

Fire & emergency	224.9		4.2			229.1			229.1		3.4			232.5

Commercial
Concrete placement	111.5		—			111.5			84.4		—			84.4
Refuse collection	101.2		—			101.2			92.2		—			92.2
Other	27.0		1.7			28.7			21.5		1.1			22.6
Total commercial	239.7		1.7			241.4			198.1		1.1			199.2
Corporate and intersegment eliminations	0.3		(6.2		)	(5.9		)	0.8		(4.8		)	(4.0		)
Consolidated	$	1,586.3	$	—		$	1,586.3		$	1,211.4	$	—		$	1,211.4



	Oshkosh Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	—		$	1,372.2		$	267.9		$	(53.8	)	$	1,586.3
Cost of sales	(0.9		)	1,153.0			245.7			(53.7		)	1,344.1
Gross income (loss)	0.9			219.2			22.2			(0.1		)	242.2
Selling, general and administrative expenses	37.8			90.3			29.7			—			157.8
Amortization of purchased intangibles	—			9.2			1.4			—			10.6
Operating income (loss)	(36.9		)	119.7			(8.9		)	(0.1		)	73.8
Interest expense	(19.0		)	(13.5		)	(0.8		)	17.9			(15.4		)
Interest income	1.3			8.0			10.3			(17.9		)	1.7
Miscellaneous, net	25.2			(62.0		)	37.3			—			0.5
Income (loss) before income taxes	(29.4		)	52.2			37.9			(0.1		)	60.6
Provision for (benefit from) income taxes	3.0			36.6			(35.1		)	0.2			4.7
Income (loss) before equity in earnings of affiliates	(32.4		)	15.6			73.0			(0.3		)	55.9
Equity in earnings of consolidated subsidiaries	88.8			57.1			(31.6		)	(114.3		)	—
Equity in earnings of unconsolidated affiliates	—			—			0.5			—			0.5
Net income	56.4			72.7			41.9			(114.6		)	56.4
Other comprehensive income (loss), net of tax	2.6			0.2			2.2			(2.4		)	2.6
Comprehensive income	$	59.0		$	72.9		$	44.1		$	(117.0	)	$	59.0



	First Quarter Fiscal
	2018			2017
Net sales:
Access equipment	$	628.2		$	489.2
Defense	493.5			294.5
Fire & emergency	229.1			232.5
Commercial	241.4			199.2
Intersegment eliminations and other	(5.9		)	(4.0		)
	$	1,586.3		$	1,211.4



	Fiscal 2018 Expectations
	Low			High

Access equipment segment operating income margin (GAAP)	9.95		%	10.50		%
Cost and inefficiencies related to restructuring actions	0.80		%	0.75		%
Adjusted access equipment segment operating income margin (non-GAAP)	10.75		%	11.25		%

Commercial segment operating income margin (GAAP)	5.35		%	5.85		%
Restructuring-related costs	0.40		%	0.40		%
Adjusted commercial segment operating income margin (non-GAAP)	5.75		%	6.25		%

Consolidated operating income (GAAP)	$	520.0		$	570.0
Cost and inefficiencies related to restructuring actions	30.0			30.0
Adjusted consolidated operating income (non-GAAP)	$	550.0		$	600.0

Effective income tax rate (GAAP)	21.8		%	21.8		%
Impact of costs and inefficiencies related to restructuring actions on the effective income tax rate	(0.1		)%	(0.1		)%
Revaluation of net deferred tax liabilities	5.1		%	4.7		%
Repatriation tax	(3.8		)%	(3.4		)%
Adjusted effective income tax rate (non-GAAP)	23.0		%	23.0		%

Earnings per share-diluted (GAAP)	$	4.75		$	5.20
Cost and inefficiencies related to restructuring actions, net of tax	0.33			0.33
Revaluation of net deferred tax liabilities	(0.31		)	(0.31		)
Repatriation tax	0.23			0.23
Adjusted earnings per share-diluted (non-GAAP)	$	5.00		$	5.45



Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1)
October 1 - October 31	—	—		—	7,512,574
November 1 - November 30	748,000	$	85.19	748,000	6,764,574
December 1 - December 31	—	—		—	6,764,574
Total	748,000			748,000	6,764,574