OSHKOSH CORP

1. Basis of Presentation

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 (SEC). 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 December 31, 2023. The interim resultsare not necessarily indicative of results for any other interim period or for 2024. Certain reclassifications have been made to the prior period financial statements to conform to the presentation as of and for the three and six months ended June 30, 2024.

2. New Accounting Standards

Standards not yet adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. The standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The Company will be required to adopt ASU 2023-07 for its Annual Report on Form 10-K for the year ended December 31, 2024. The Company does not expect the adoption of ASU 2023-07 will have a material impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. The standard requires that public business entities (1) disclose specific categories in the income tax rate reconciliation and (2) provide additional information for reconciling items if the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pre-tax income or loss by the applicable statutory income tax rate. The standard also requires additional disclosures about income taxes paid, the allocation of income or loss from continuing operations disaggregated between domestic and foreign and income tax expense disaggregated by federal, state and foreign. The Company will be required to adopt ASU 2023-09 for its Annual Report on Form 10-K for the year ended December 31, 2025. The Company does not expect the adoption of ASU 2023-09 will have a material impact on the Company’s consolidated financial statements.

3. Acquisitions and Divestitures

Acquisition of AeroTech

On August 1, 2023, the Company acquired 100% of JBT AeroTech (AeroTech) from JBT Corporation for $804.6 million. AeroTech, a leading provider of aviation ground support products, gate equipment and airport services provided to commercial airlines, airports, air-freight carriers, ground handling customers and the military, is part of the Vocational segment. The purchase price included $808.0 million in cash, a receivable of $10.0 million for certain post-closing information technology integration costs, a payable of $5.1 million for certain post-closing working capital adjustments and a payable of $1.5 million for required equity replacement awards. The acquisition was funded with cash on hand and borrowings under the Company’s existing Revolving Credit Facility. See Note 13 for additional information regarding the Company’s debt. During the first quarter of 2024, the Company paid JBT Corporation $5.1 million for post-closing working capital adjustments.

The results of AeroTech have been included in the Company’s Condensed Consolidated Statements of Income from the date of acquisition. AeroTech had sales of $192.0 million and $368.1 million during the three and six months ended June 30, 2024, respectively.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the date of acquisition (in millions):

The purchase price, net of cash acquired, was allocated based on the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition with the excess purchase price recorded as goodwill, all of which was allocated to the Vocational segment. The majority of the goodwill is deductible for income tax purposes. The purchase price allocations are considered final at June 30, 2024.

Unaudited pro forma financial information

The following table presents the supplemental consolidated results of the Company on an unaudited pro forma basis as if the acquisition of AeroTech had been completed on January 1, 2022 (in millions). The primary adjustments reflected in the unaudited pro-forma information related to (1) increase in interest expense for debt used to fund the acquisition and lower interest income due to less cash on hand available to be invested and (2) changes related to purchase accounting primarily related to amortization of purchased intangible assets recorded in conjunction with the acquisition. Adjustments to net income have been reflected net of income tax effects. The unaudited pro forma information does not include any anticipated cost savings or other effects of future integration efforts and does not purport to be indicative of results that actually would have been achieved if the operations were combined during the periods presented and is not intended to be a projection. The unaudited pro forma financial information does not reflect any potential cost savings, operating efficiencies, debt pay down, financial synergies or other strategic benefits as a result of the acquisition or any restructuring costs to achieve those benefits.

Acquisition of Hinowa

On January 31, 2023, the Company acquired Hinowa S.p.A. (Hinowa), an Italian manufacturer of compact crawler booms and tracked equipment, for€171.8 million ($186.8 million), net of cash acquired. Hinowa is part of the Access segment. The results of Hinowa have been included in the Company’s Condensed Consolidated Statements of Income from the date of acquisition. Pro-forma results of operations have not been presented as the effect of the acquisition is not material to any periods presented.

Agreement to Acquire AUSA

On May 8, 2024, the Company entered into a definitive agreement to acquire AUSACORP S.L. (AUSA), a privately held Spanish manufacturer of wheeled dumpers, rough terrain forklifts and telehandlers, for €115.0 million. The transaction, which is subject to customary closing conditions, is expected to close in the second half of 2024.

Divestitures

On July 24, 2023, the Company completed the sale of its snow removal apparatus business for $17.1 million. A pre-tax gain of $8.0 million was recognized on the sale during the third quarter of 2023. The snow removal apparatus business was included in the Defense segment.

On March 1, 2023, the Company completed the sale of its rear-discharge concrete mixer business for $32.9 million. A pre-tax loss of $13.3 million was recognized on the sale during the first quarter of 2023, which is included in selling, general and administra tive expense in the Company’s Condensed Consolidated Statements of Income. The rear-discharge concrete mixer business was included in the Vocational segment.

4. Revenue Recognition

The Company utilizes the cost-to-cost method of percentage-of-completion to recognize revenue on the majority of its performance obligations that are satisfied over time because it best depicts the transfer of control to the customer. Under the cost-to-cost method of percentage-of-completion, the Company measures progress based on the ratio of costs incurred to date to total estimated costs for the performance obligation. The Company recognizes changes in estimated sales or costs and the resulting profit or loss on a cumulative basis. Contract adjustments represent the cumulative effect of 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. Revenue allocated to performance obligations that represent a material right for a customer to acquire goods or services at a discount in the future is recognized as those future goods or services are transferred or when the material right expires.

There is significant judgment involved in estimating costs, most notably within the Defense segment. Each contract is evaluated to identify risks and estimate revenue and costs. In performing this evaluation, the Company considers risks of contract performance such as technical requirements, schedule, duration and key contract dependencies. 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 such as new orders are received, the additional units are factored into the overall contract estimate of costs and transaction price.

Net contract adjustments impacted the Company’s results as follows (in millions, except per share amounts):

The Defense segment incurs pre-production engineering, factory setup and other contract fulfillment costs related to products produced for its customers under long-term contracts. An asset is recognized 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. Costs related to customer-owned tooling that will be used in production and for which the customer has provided a non-cancelable right to use the tooling to perform during the contract term are also recognized as a deferred contract cost asset. Deferred contract costs related to the Next Generation Delivery Vehicles (NGDV) contract with the United States Postal Service (USPS) are amortized over the anticipated production volume of the NGDV contract. The Company periodically assesses its contract fulfillment and customer-owned tooling for impairment. The Company didnot recognize any impairment losses on contract fulfillment or customer-owned tooling costs in thethree and six months ended June 30, 2024 or 2023.

Deferred contract costs, the majority of which are related to the NGDV contract, consisted of the following (in millions):

Disaggregation of Revenue

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

See Note 20 for further disaggregated sales information.

Contract Assets and Contract Liabilities

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. The Company didnot record any impairment losses on contract assets during thethree and six months ended June 30, 2024 or 2023.

The Company is generally entitled to bill its customers upon satisfaction of its performance obligations, except for its long-term contracts in the Defense segment which typically allow for billing upon acceptance of the finished goods, payments received from customers in advance of performance, payments received for a material right to purchase future goods or services and extended warranties that are billed in advance of the warranty coverage period. Customer payment terms generally do not exceed one year. See Note 9 for additional information on the Company’s receivables balances.

With the exception of Pierce Manufacturing Inc. (Pierce) in the Vocational segment, the Company’s contracts typically do not contain a significant financing component. Pierce customers earn interest on customer advances at a rate determined in a separate financing transaction between Pierce and the customer at contract inception. Interest charges for amounts due on customer advances are recorded in “Interest expense” in the Condensed Consolidated Statements of Income and were$9.2 million and$6.0 million for the three months ended June 30, 2024 and 2023 and were$18.0 million and$12.3 million for the six months ended June 30, 2024 and 2023, respectively.

The 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 assets and liabilities are determined on a net basis for each contract. Contract liabilities consisted of the following (in millions):

Revenue recognized during the period from beginning contract liabilities was as follows (in millions):

The Company offers a variety of service-type warranties, including optionally priced extended warranty programs. Outstanding balances related to service-type warranties are included within contract liabilities. Revenue related to service-type warranties is deferred until after the expiration of the standard warranty period. The revenue is then recognized over the term of the service-type warranty period in proportion to the costs that are expected to be incurred. Changes in the Company’s service-type warranties were as follows (in millions):

Classification of service-type warranties in the Condensed Consolidated Balance Sheets consisted of the following (in millions):

Remaining Performance Obligations

As of June 30, 2024, the Company had unsatisfied performance obligations for contracts with an original duration greater than one year totaling$11.34 billion, of which$1.71 billion is expected to be satisfied and recognized in revenue in the remaining six months of 2024,$3.58 billion is expected to be satisfied and recognized in revenue in 2025 and$6.05 billion is expected to be satisfied and recognized in revenue after 2025.

5. Stock-Based Compensation

In May 2024, the Company’s shareholders approved the 2024 Incentive Stock and Awards Plan (the “2024 Stock Plan”). The 2024 Stock Plan replaced the 2017 Incentive Stock Awards Plan (as amended, the "2017 Stock Plan"). While no new awards will be granted under the 2017 Stock Plan, awards previously made under that plan that were outstanding as of the approval date of the 2024 Stock Plan will remain outstanding and continue to be governed by the provisions of that plan. At June 30, 2024, the Company had reserved 3,721,813 shares of Common Stock available for the issuance of Common Stock and the exercise of outstanding stock options under incentive compensation awards, including awards issued prior to the effective date of the 2024 Stock Plan.

The Company recognizes stock-based compensation expense over the requisite service period for vesting of an award. Total stock-based compensation expense, including cash-settled liability awards, was$11.4 million ($10.0 million net of tax) and$9.0 million ($7.6 million net of tax) for the three months ended June 30, 2024 and 2023, respectively, and$20.7 million ($18.1 million net of tax) and$15.8 million ($13.4 million net of tax) for the six months ended June 30, 2024 and 2023, respectively.

6. Employee Benefit Plans

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

Components of net periodic benefit cost other than “Service cost” and “Expenses paid” are included in “Miscellaneous, net” in the Condensed Consolidated Statements of Income.

7. Income Taxes

The Company recorded income tax expense of$53.5 million, or 23.4% of pre-tax income, for the three months ended June 30, 2024, compared to$56.3 million, or 24.3% of pre-tax income, for the three months ended June 30, 2023. Results for the three months ended June 30, 2024 were impacted by $2.0 million of net discrete tax benefits, including a $1.9 million benefit on the purchase of discounted federal tax credits. Results for thethree months ended June 30, 2023 were impacted by $1.2 million of net discrete tax charges.

The Company recorded income tax expense of$108.2 million, or 23.2% of pre-tax income, for the six months ended June 30, 2024, compared to$90.5 million, or 25.1% of pre-tax income, for the six months ended June 30, 2023. Results for the six months ended June 30, 2024 were impacted by $4.2 million of net discrete tax benefits, including a $3.1 million benefit on the purchase of discounted federal tax credits and a $1.0 million benefit related to amended state returns. Results for thesix months ended June 30, 2023 were impacted by $4.2 million of net discrete tax charges, including a $2.5 million charge related to a valuation allowance recorded with respect to unrealizable foreign tax credits and a $1.7 million charge related to a valuation allowance recorded with respect to a deferred tax asset on marketable securities.

The Company’s liability for gross unrecognized tax benefits, excluding related interest and penalties, was$66.2 million and$64.3 million as of June 30, 2024 and December 31, 2023, respectively. As of June 30, 2024, net unrecognized tax benefits, excluding interest and penalties, of$52.4 million would affect the Company’s net income if recognized. 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$23.0 million because the Company’s tax positions are sustained on audit, the Company agrees to their disallowance or the statutes of limitations close.

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 six months ended June 30, 2024 and 2023, the

Company recognized expense of$2.1 million and$0.9 million, respectively, related to interest and penalties on unrecognized tax benefits. At June 30, 2024, the Company had accruals for the payment of interest and penalties of$9.9 million.

Cash paid for income taxes, net of refunds disclosed on the Condensed Consolidated Statements of Cash Flows includes cash paid for the purchase of transferable tax credits during the six months ended June 30, 2024 and 2023 of $44.3 million and $2.9 million, respectively.

8. Earnings Per Share

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

Shares for stock-based compensation excluded from the computation of diluted earnings per share attributable to common shareholders because they would have been anti-dilutive were as follows:

9. Receivables

Receivables consisted of the following (in millions):

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

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

10. Inventories

Inventories consisted of the following (in millions):

11. Property, Plant and Equipment

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

Depreciation expense was$27.2 million and$25.8 million for the three months ended June 30, 2024 and 2023, respectively, and$53.3 million and$49.1 million for the six months ended June 30, 2024 and 2023, respectively.

12. Goodwill and Purchased Intangible Assets

Goodwill and other indefinite-lived intangible assets are not amortized but are assessed 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.

During the 2023 annual impairment review, the estimated fair value of the Pratt Miller reporting unit exceeded its carrying value by approximately 10%. During the three months ended June 30, 2024, the Company assessed Pratt Miller for impairment as a result of unfavorable performance compared to forecast and adverse market conditions related to mobility and motorsports leading to a decline in the Company's expectations for future performance. The Company used a combination of the income and market approaches. A weighted-average cost of capital of 13.0% (14.0% at October 1, 2023) and a terminal growth rate of 3.0% (3.0% at October 1, 2023) were used by the Company to estimate the fair value of the reporting unit. Under the market approach, the Company derived the fair value of the reporting unit based on an earnings multiple of comparable publicly traded companies. Changes in estimates or the application of alternative assumptions could have produced significantly different results, or could result in additional impairments in the future. As a result of the assessment, the Company recorded an impairment charge of $38.7 million within "Intangible asset impairments" in the Condensed Consolidated Statement of Income. After giving effect to the impairment charge, the remaining goodwill allocated to Pratt Miller was $5.7 million.

The following table presents changes in goodwill during thesix months ended June 30, 2024 (in millions):

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

Pratt Miller's purchased intangibles were also assessed for impairment. The Company used the relief-from-royalty and multiple-period excess earnings approaches to estimate the fair value of a trade name and customer relationship asset, respectively. As a result of the assessments, the Company recorded impairment charges of $8.8 million related to the trade name and $4.1 million related to the customer relationship within "Intangible asset impairments" in the Condensed Consolidated Statement of Income. After giving effect to the impairment charges, Pratt Miller's remaining amortizable purchased intangible assets were $19.2 million.

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

Amortization of purchased intangible assets was$15.7 million and$31.3 million (including$2.1 million and$4.2 million recognized in "Cost of sales" in the Condensed Consolidated Statements of Income) for the three and six months ended June 30, 2024, respectively.

Estimated future amortization expense for purchased intangible assets is as follows (in millions):

13. Debt

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

On March 23, 2022, the Company entered into a Third Amended and Restated Credit Agreement with various lenders (the “Credit Agreement”). The Credit Agreement provides for an unsecured revolving credit facility (the “Revolving Credit Facility”) that matures in March 2027 with an initial maximum aggregate amount of availability of $1.1 billion. On April 3, 2024, the Company amended the Credit Agreement to increase the maximum aggregate amount of availability under the Revolving Credit Facility to $1.55 billion. At June 30, 2024, borrowings under the Revolving Credit Facility of$1.04 billion and specified outstanding letters of credit of$11.9 million reduced available capacity under the Revolving Credit Facility to$501.6 million.

Under the Credit Agreement, the Company is obligated to pay (i) an unused commitment fee ranging from 0.080% to 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 0.438% to 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) 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) the base rate (which is the highest of (x) Bank of America, N.A.’s prime rate, (y) the federal funds rate plus 0.50% or (z) the sum of 1.00% plus one-month Term SOFR) plus a specified margin, which may be adjusted upward or downward depending on whether certain criteria are satisfied. At June 30, 2024, the interest spread on the Revolving Credit Facility was 112.5 basis points, resulting in an interest rate of 6.56%.

The Credit Agreement contains various restrictions and covenants, including a requirement that the Company maintain a leverage ratio at certain levels, 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 and consummate acquisitions and a restriction on the disposition of all or substantially all of the assets of the Company and its subsidiaries taken as a whole.

The Credit Agreement requires the 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 quarter of 3.75 to 1.00, subject to the Company’s right to temporarily increase the maximum leverage ratio to 4.25 to 1.00 in connection with certain material acquisitions. The Company was in compliance with the financial covenant contained in the Credit Agreement as of June 30, 2024.

In conjunction with the Hinowa acquisition on January 31, 2023, the Company assumed €16.3 million ($17.7 million) of outstanding debt of the acquiree, of which €14.3 million ($15.5 million) was repaid by the Company in February 2023. As of June 30, 2024, €2.7 million ($2.9 million) was outstanding at Hinowa with a weighted average interest rate of 1.24%.

In September 2019, the Company entered into an uncommitted line of credit to provide short-term finance support to operations in China. The line of credit carries a maximum availability of 426.0 million Chinese renminbi. There wereno amounts outstanding on the line of credit as of June 30, 2024 or December 31, 2023. The line of credit carries a variable interest rate that is set by the lender, which was 3.95% at June 30, 2024.

In May 2018, the Company issued $300.0 million of 4.60% unsecured senior notes due May 15, 2028 (the “2028 Senior Notes”). In February 2020, the Company issued $300.0 million of 3.10% unsecured senior notes due March 1, 2030 (the “2030 Senior Notes”). The 2028 Senior Notes and the 2030 Senior Notes were issued pursuant to an indenture (the “Indenture”) between the Company and a trustee. The Indenture contains customary affirmative and negative covenants. The Company has the option to redeem the 2028 Senior Notes and 2030 Senior Notes at any time for a premium.

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 June 30, 2024, the fair value of the 2028 Senior Notes and the 2030 Senior Notes was estimated to be$292 million ($295 million at December 31, 2023) and$265 million ($269 million at December 31, 2023), respectively. The fair value of the revolving credit facilities approximated their carrying values at June 30, 2024 and December 31, 2023. See Note 19 for the definition of a Level 2 input.

14. Warranties

The Company’s products generally carry standard warranties that extend fromsix months tofive years, based on terms that are generally accepted in the marketplace. Selected components (such as engines, transmissions, batteries, 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.

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 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 consolidated financial condition, results of operations or cash flows.

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

15. Guarantee Arrangements

Customers of the Company, from time to time, may fund purchases from the Company 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 June 30, 2024 the Company guaranteed an aggregate of$614.3 million in indebtedness of customers. At June 30, 2024, the Company estimated that its maximum loss exposure under these contracts was$93.0 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 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’ 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. During periods of economic weakness, collateral values generally decline and can contribute to higher exposure to losses.

Residual Value Guarantees: The Company is party to multiple agreements whereby at June 30, 2024 the Company guaranteed to support an aggregate of$118.0 million of customer equipment value. At June 30, 2024, the Company estimated that its maximum loss exposure under these contracts was$13.6 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 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 Company’s stand ready obligations (non-contingent) to perform under guarantees were as follows (in millions):

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 non-current liabilities” in the Company’s Condensed Consolidated Balance Sheets.

Changes in the Company’s off-balance sheet credit loss exposure (contingent) related to its guarantees were as follows (in millions):

16. Contingencies

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 claims up to $10.0 million per claim ($5.0 million per claim prior to April 1, 2024) and a reserve is maintained for the estimated costs of such claims. At June 30, 2024 and December 31, 2023, the estimated net liabilities for product and general liability claims totaled$42.2 million and$50.1 million, respectively. While there is inherent uncertainty as to the eventual resolution of unsettled claims, management 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$2.72 billion and$2.58 billion at June 30, 2024 and December 31, 2023, respectively. Outstanding letters of credit issued by the Company’s banks in favor of third parties totaled$14.4 million and$18.2 million at June 30, 2024 and December 31, 2023, 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 such matters and claims cannot be predicted with certainty, management believes that the ultimate resolution 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 government customers 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.

17. Shareholders’Equity

In May 2019, the Company’s Board of Directors approved a Common Stock repurchase authorization for which there was remaining authority to repurchase 4,109,419 shares of Common Stock as of May 3, 2022. On May 3, 2022, the Board of Directors increased the Common Stock repurchase authorization by 7,890,581 shares to 12,000,000 shares as of that date. As of June 30, 2024, the Company had remaining authority to repurchase 10,820,689 shares of Common Stock.

Changes to the Company's common shares outst anding were as follows (in shares):

18. Accumulated Other Comprehensive Income (Loss)

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

Reclassifications out of accumulated other comprehensive income (loss) included in the computation of net periodic pension and postretirement benefit cost (See Note 6 for additional details regarding benefit plans) are included within Miscellaneous, net within the Condensed Consolidated Statements of Income and were as follows (in millions):

19. Fair Value Measurement

FASB 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.

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 own assumptions about the inputs used in pricing the asset or liability.

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

(a)

Represents investments held in a rabbi trust for the 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.

20. Business Segment Information

The Company is organized into three reportable segments based on the internal organization used by the 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. The Company’s reportable segments are as follows:

Access: This segment consists of JLG and JerrDan. JLG designs and manufactures aerial work platforms and telehandlers that are sold worldwide for use in a wide variety of construction, industrial, institutional and general maintenance applications to position workers and materials at elevated heights. JerrDan designs and manufactures towing and recovery equipment. Access customers include equipment rental companies, construction contractors, manufacturing companies, home improvement centers and towing companies.

Defense: This segment consists of Oshkosh Defense and Pratt Miller. Oshkosh Defense designs and manufactures tactical wheeled vehicles and supplies parts and services for the U.S. military and other militaries around the world and delivery vehicles for the USPS. Pratt Miller provides engineering and product development services primarily to customers in the motorsports and multiple ground vehicle markets.

Vocational: This segment includes Pierce, Airport Products, Maxi-Metal, McNeilus, Oshkosh AeroTech, IMT and Oshkosh Commercial. Pierce, Airport Products and Maxi-Metal design and manufacture commercial and custom fire apparatus and emergency vehicles primarily for fire departments, airports and other governmental units. McNeilus designs and manufactures refuse collection vehicles and components. Oshkosh AeroTech designs and manufactures aviation ground support products and gate equipment and provides airport services to commercial airlines, airports, air-freight carriers, ground handling customers and militaries. IMT designs and manufactures field service vehicles and truck-mounted cranes for niche markets. Oshkosh Commercial designs and manufactures front-discharge concrete mixer vehicles and components.

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, certain new product development costs, stock-based compensation, costs of certain business initiatives and shared services or operations benefiting multiple segments and results of insignificant operations. 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.

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

(a)

Results for the three and six months ended June 30, 2024 include $51.6 million of intangible asset impairments. See Note 12 for additional details on the Company's goodwill and purchased intangible assets.

(b)

Results for the six months ended June 30, 2023 include a charge of $13.3 million on the sale of the rear-discharge mixer business. See Note 3 for additional details on the Company's divestitures.

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