Oshkosh Corporation

Cautionary Statement About Forward-Looking Statements

This 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 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 “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 cyclical nature of the Company’s access equipment, fire apparatus, refuse and recycling collection and air transportation equipment markets, which are particularly impacted by the strength of U.S. and European economies and construction outlooks; the Company’s estimates of access equipment demand which, among other factors, is influenced by historical customer buying patterns and rental company fleet replacement strategies; the Company's ability to predict the level and timing of orders and costs on the U.S. Postal Service contract; the Company's ability to increase production rates in its municipal fire apparatus and delivery businesses; risks that trade wars and related tariffs could further reduce demand for or competitiveness of the Company’s products or cause inefficiencies in the Company's supply chain; the Company’s ability to increase prices to raise margins or to offset higher input costs; the Company's ability to achieve its projected material and manufacturing efficiency savings; the Company's ability to accurately predict future input costs associated with U.S. Department of Defense contracts; the Company’s ability to attract and retain production labor in a timely manner; the strength of the U.S. dollar and its impact on Company exports, translation of foreign sales and the cost of purchased materials; the impact of severe weather, war, natural disasters or pandemics that may affect the Company, its suppliers or its customers; budget uncertainty for the U.S. federal government, including risks of future budget cuts, the impact of continuing resolution funding mechanisms or a prolonged federal government shutdown; the impact of any U.S. Department of Defense solicitation for competition for future contracts to produce military vehicles; risks related to the collectability of receivables, particularly for those businesses with exposure to construction markets; the cost of any warranty campaigns related to the Company’s products; risks associated with international operations and sales, including compliance with the Foreign Corrupt Practices Act; the Company’s ability to comply with complex laws and regulations applicable to U.S. government contractors; cybersecurity risks and costs of defending against, mitigating and responding to data security threats and 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 SEC filings, including, but not limited to, those described in the Company’s most recent Annual Report on Form 10-K and Item 1A. of Part II of this Quarterly Report on Form 10-Q.

All forward-looking statements, including those under the caption “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 earnings per share assuming dilution.

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General

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

Access — aerial work platforms and telehandlers used in a wide variety of construction, industrial, agricultural, vegetation management and maintenance applications to position workers and materials at elevated heights. Access customers include equipment rental companies, construction contractors and home improvement centers. The Access segment also manufactures carriers and wreckers sold to towing companies.

Vocational — custom and commercial firefighting vehicles and equipment sold to municipal fire departments; aviation ground support products, gate equipment and airport services sold to commercial airlines, airports, air-freight carriers, ground handling customers and the military; aircraft rescue and firefighting (ARFF) vehicles sold to airports and the U.S. military; refuse and recycling collection vehicles sold to commercial and municipal waste haulers; field service vehicles and truck-mounted cranes sold to mining, construction and equipment rental companies; simulators, mobile command vehicles and other emergency vehicles sold to fire departments and other governmental units; and front-discharge concrete mixers sold to ready-mix companies.

Transport — tactical vehicles, trailers and parts sold to the U.S. military and to other militaries around the world and the Next Generation Delivery Vehicle (NGDV) for the United States Postal Service (USPS).

Overview

Consolidated sales in the second quarter of 2026 of $2.92 billion increased $183 million, or 6.7%, compared to the second quarter of 2025. The increase was primarily the result of higher sales volume, largely in the Access segment, and improved pricing. Consolidated operating income in the second quarter of 2026 was $243 million, or 8.3% of sales, compared to $292 million, or 10.7% of sales, in the second quarter of 2025. The decrease in consolidated operating income was primarily the result of unfavorable sales mix and higher manufacturing overhead costs, offset in part by the impact of higher gross margin associated with higher sales volume.

The Company's effective tax rate in the second quarter of 2026 included net discrete tax benefits of $16 million, primarily related to the expiration of the statute of limitations for a foreign anti-hybrid tax matter.

The Company continued to repurchase shares of its Common Stock, repurchasing 667,158 shares during the second quarter of 2026 for $92 million, bringing share repurchases for the first six months of 2026 to $139 million. Share repurchases during the previous twelve months benefited earnings per share during the second quarter of 2026 by $0.09 compared to the second quarter of 2025.

The Access segment delivered double-digit operating income margin during the second quarter of 2026 with strong sales in a dynamic environment. Access segment orders during the quarter were strong at $1.5 billion, resulting in a book-to-bill ratio of 1.1. Access segment backlog of $2.0 billion at June 30, 2026 provides great visibility for the remainder of 2026.

In the Vocational segment, we are continuing actions to modernize our municipal fire apparatus manufacturing and expand production to better serve customer demand. In the second quarter, the Company implemented new production changes to improve throughput that identified new material flow requirements, shifting from reliance on individuals with experience to standardized process flow. These new requirements are expected to result in a more gradual increase in throughput than previously expected.

The Company now expects its 2026 diluted earnings per share to be in the range of $10.50 on net sales of approximately $11.2 billion, compared to the Company's most recent estimates of diluted earnings per share of $10.90 on sales of $11.0 billion. The updated guidance primarily reflects a more gradual increase in the rate of municipal fire apparatus production. The earnings per share estimate includes after-tax charges of $0.72 per share related to amortization of purchased intangible assets and a $0.22 per share benefit relating to the expiration of a foreign anti-hybrid tax matter. Excluding these items, the Company now expects 2026 adjusted earnings per share to be in the range of $11.00.

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As the Company continues to manage the business in an evolving landscape, it is not providing 2026 expectations by segment. The Company believes fourth quarter results will be stronger than the third quarter as municipal fire apparatus capacity plans progress, it receives an expected order for additional NGDVs, it increases NGDV production and it builds more vehicles under revised defense contracts. The Company expects that the fourth quarter momentum will carry forward into 2027.

RESULTS OF OPERATIONS

CONSOLIDATED RESULTS

The following table presents consolidated results (in millions):

Second Quarter 2026 Compared to 2025

Consolidated net sales increased primarily due to higher sales volume ($87 million) and improved pricing ($68 million).

The decrease in consolidated gross margin was primarily due to unfavorable sales mix (200 basis points), higher material costs (170 basis points), primarily related to higher tariff costs, and higher manufacturing overhead costs (80 basis points), offset in part by improved pricing (170 basis points).

The increase in consolidated selling, general and administrative expenses was primarily the result of higher employee compensation ($7 million) and increased legal and professional fees ($4 million).

The Company recorded an intangible asset impairment related to Pratt Miller of $6 million during the second quarter of 2025.

The decrease in consolidated operating income was primarily due to higher material costs ($55 million), unfavorable sales mix ($52 million), higher manufacturing overhead costs ($25 million) and higher warranty costs ($10 million), offset in part by improved pricing ($68 million) and the impact of higher gross margin associated with higher sales volume ($23 million).

First Six Months 2026 Compared to 2025

Consolidated net sales increased primarily due to improved pricing ($105 million), higher sales volume ($28 million) and favorable currency impacts ($25 million).

The decrease in consolidated gross margin was primarily due to adverse sales mix (200 basis points), increased material costs (160 basis points), primarily related to higher tariff costs, and higher manufacturing overhead (100 basis points), offset in part by improved pricing (150 basis points).

Consolidated selling, general and administrative expenses increased primarily due to higher employee compensation ($15 million).

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The Company recorded an intangible asset impairment related to Pratt Miller of $6 million during the second quarter of 2025.

The decrease in consolidated operating income was primarily due to adverse sales mix ($99 million), increased material costs ($93 million) and higher manufacturing overhead ($50 million), offset in part by improved pricing ($105 million).

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