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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

Commission file number:  1-31371

Oshkosh Corporation

(Exact name of registrant as specified in its charter)

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

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

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

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. x Yes o No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o Yes x No

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. x 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). x Yes o No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

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

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

At March 31, 2010, the aggregate market value of the registrant’s Common Stock held by non-affiliates was $3,617,485,910 (based on the closing price of $40.34 per share on the New York Stock Exchange as of such date).

As of November 15, 2010, 90,717,689 shares of the registrant’s Common Stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Proxy Statement for the Annual Meeting of Shareholders to be held on February 1, 2011 (to be filed with the Commission under Regulation 14A within 120 days after the end of the registrant’s fiscal year and, upon such filing, to be incorporated by reference into Part III).

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OSHKOSH CORPORATION

FISCAL 2010 ANNUAL REPORT ON FORM 10-K

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As used herein, the “Company,” “we,” “us” and “our” refers to Oshkosh Corporation and its consolidated subsidiaries.  “Oshkosh” refers to Oshkosh Corporation, not including JLG Industries, Inc. and its wholly-owned subsidiaries (“JLG”), Pierce Manufacturing Inc. (“Pierce”), McNeilus Companies, Inc. (“McNeilus”) and its wholly-owned subsidiaries, Kewaunee Fabrications, LLC (“Kewaunee”), Medtec Ambulance Corporation (“Medtec”), JerrDan Corporation (“JerrDan”), Concrete Equipment Company, Inc. and its wholly-owned subsidiary (“CON-E-CO”), London Machinery Inc. and its wholly-owned subsidiary (“London”), Oshkosh Specialty Vehicles, Inc., AK Specialty Vehicles B.V. and their wholly-owned subsidiaries (together, “OSV”) and Iowa Mold Tooling Co., Inc. (“IMT”) or any other subsidiaries.

The “OshkoshÒ,” “JLGÒ,” “Jerr-DanÒ,” “PierceÒ,” “FrontlineÔ,” “MEDTECÒ,” “SMITÔ,” “McNeilusÒ,” “CON-E-COÒ,” “LondonÒ,” “IMTÒ,” “SkyTrakÒ,” “LullÒ,” “ToucanÒ,” “RevolutionÒ,” “Command ZoneÔ,” “All-SteerÒ,” “TAK-4Ò,” “HerculesÔ,” “HuskyÔ,” “VelocityÔ,” “ImpelÔ,” “Smart-PakÒ,” “PUCÔ,” “LiftpodÔ,” “ClearSkyÔ,” “Auto ReachÒ,” “Sky-ArmÒ,” “TerraMaxÔ“ and “ProPulseÒ“ trademarks and related logos are trademarks or registered trademarks of the Company.  All other product and service names referenced in this document are the trademarks or registered trademarks of their respective owners.

All references herein to earnings per share refer to earnings per share assuming dilution, unless noted otherwise.

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

Cautionary Statement About Forward-Looking Statements

The Company believes that certain statements in “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other statements located elsewhere in this Annual Report on Form 10-K are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements other than statements of historical fact included in this report, including, without limitation, statements regarding the Company’s future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, including those under the caption “Executive Overview” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are forward-looking statements.  When used in this Annual Report on Form 10-K, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements.  These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements.  Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in Item 1A of Part I of this report.

All forward-looking statements, including those under the caption “Executive Overview” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” speak only as of November 18, 2010.  The Company assumes no obligation, and disclaims any obligation, to update information contained in this Annual Report on Form 10-K.  Investors should be aware that the Company may not update such information until the Company’s next quarterly earnings conference call, if at all.

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PART I

ITEM 1.                BUSINESS

The Company

The Company is a leading designer, manufacturer and marketer of a broad range of specialty vehicles and vehicle bodies.  The Company partners with customers to deliver superior solutions that safely and efficiently move people and materials at work, around the globe, and around the clock.  The Company began business in 1917 and was among the early pioneers of four-wheel drive technology.  The Company operates in four reportable segments for financial reporting purposes: defense, access equipment, fire & emergency and commercial, which comprised 73%, 13%, 9% and 5%, respectively, of the Company’s consolidated net sales in fiscal 2010.  See Note 21 to the Consolidated Financial Statements for financial information related to the Company’s business segments.

The Company has sold products to the U.S. Department of Defense (“DoD”) for over 80 years.  In 1981, Oshkosh was awarded the first Heavy Expanded Mobility Tactical Truck (“HEMTT”) contract for the DoD, and thereafter its defense segment developed into the DoD’s leading supplier of severe-duty, heavy-payload tactical trucks.  In recent years, Oshkosh has broadened its defense product offerings to become the leading manufacturer of severe-duty, heavy- and medium-payload tactical trucks for the DoD, manufacturing vehicles that perform a variety of demanding tasks such as hauling tanks, missile systems, ammunition, fuel, troops and cargo for combat units.  In June 2009, the DoD awarded the Company a sole source contract for MRAP All Terrain Vehicles (“M-ATVs”), the Company’s first major entry into the market for light tactical vehicles.  In August 2009, the DoD awarded the Company a five-year requirements contract for the production of up to 23,000 medium-payload tactical vehicles and trailers as well as supporting services and engineering under the U.S. Army’s Family of Medium Tactical Vehicles (“FMTV”) Rebuy program.

In fiscal 2007, the Company acquired JLG, a global manufacturer of aerial work platforms and telehandlers used in a wide variety of construction, agricultural, industrial, institutional and general maintenance applications to position workers and materials at elevated heights.  JLG forms the base of the Company’s access equipment segment.  JLG’s customers include equipment rental companies, construction contractors, manufacturing companies, home improvement centers and the U.S. military.  During fiscal 2010, in conjunction with the appointment of a new access equipment segment president, the Company transferred operational responsibility of JerrDan from the fire & emergency segment to the access equipment segment.  As a result, JerrDan has been included with the access equipment segment for financial reporting purposes.  Historical information has been reclassified to include JerrDan in the access equipment segment for all periods presented.  JerrDan, which the Company acquired in fiscal 2004, manufactures traditional tow trucks (“wreckers”) and roll-back vehicle carriers (“carriers”) sold to towing companies in the U.S. and abroad.

The Company’s fire & emergency segment manufactures commercial and custom firefighting vehicles and equipment, aircraft rescue and firefighting (“ARFF”) vehicles, snow removal vehicles, ambulances and other emergency vehicles primarily sold to fire departments, airports and other governmental units in the Americas and abroad; mobile medical trailers sold to hospitals and third-party medical service providers in the U.S. and Europe; and broadcast vehicles sold to broadcasters and television stations in the Americas and abroad.

The Company’s commercial segment manufactures rear- and front-discharge 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 North America and other international markets and field service vehicles and truck-mounted cranes sold to mining, construction and other companies in the Americas and abroad.

Competitive Strengths

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

Strong Market Positions.  The Company has developed strong market positions and brand recognition in its core businesses, which it attributes to its reputation for quality products, advanced engineering, innovation, vehicle performance, reliability, customer service and low total product life cycle costs.  The Company maintains leading market shares in most of its businesses and is the sole-source supplier of a number of vehicles to the DoD, including M-ATVs.

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Diversified Product Offering.  The Company believes its broad product offerings and target markets serve to diversify its sources of revenues, mitigate the impact of economic cycles and provide multiple platforms for potential organic growth and acquisitions.  For each of its target markets, the Company has developed or acquired a broad product line in an effort to become a single-source provider of specialty vehicles, vehicle bodies, parts and service and related products to its customers.  In addition, the Company has established an extensive domestic and international distribution system for specialty vehicles and vehicle bodies tailored to each market.

Quality Products and Customer Service.  The Company has developed strong brand recognition among its products as a result of its commitment to meet the stringent product quality and reliability requirements of its customers in the specialty vehicle and vehicle body markets it serves.  The Company also achieves high quality customer service through its extensive parts and service support programs, which are generally available to customers 365 days a year in all product lines throughout the Company’s distribution systems.

Innovative and Proprietary Components.  The Company’s advanced design and engineering capabilities have contributed to the development of innovative and/or proprietary, severe-duty components that enhance vehicle performance, reduce manufacturing costs and strengthen customer relationships.  The Company’s advanced design and engineering capabilities have also allowed it to integrate many of these components across various product lines, which enhances its ability to compete for new business and reduces its costs to manufacture its products compared to manufacturers who simply assemble purchased components.  Examples of the Company’s innovative components include:

·                  The TAK-4 independent suspension system, which the Company is able to install on other manufacturers’ Mine Resistant Ambush Protected (“MRAP”) vehicles and which the Company believes was critical to the Company winning the M-ATV contract;

·                  The Pierce Ultimate Configuration (“PUC”) vehicle configuration, which eliminates the bulky pumphouse from firefighting vehicles, making such vehicles easier to use and service;

·                  The pulse technology on the Company’s new Global Striker, which allows the customer to deliver dry chemical powder 90 feet;

·                  The integration of compressed natural gas to power McNeilus’ refuse collection vehicles and concrete mixers, which reduces fuel costs and emissions; and

·                  ClearSky telematics solution for JLG aerial work platforms, which remotely connects a rental fleet, providing information on location, operating status and equipment health.

Flexible and Efficient Manufacturing.  Over the past 14 years, the Company has significantly increased manufacturing efficiencies.  The Company believes it has competitive advantages over larger vehicle manufacturers in its specialty vehicle markets due to its manufacturing flexibility, vertical integration, purchasing power in specialty vehicle components and custom fabrication capabilities.  In addition, the Company believes it has competitive advantages over smaller vehicle and vehicle body manufacturers due to its relatively higher volumes of similar products that permit the use of moving assembly lines and which allow it to leverage purchasing power opportunities across product lines.  The Company believes its ability to meet the aggressive delivery requirements for more than 7,500 M-ATVs and the launch of FMTV production in fiscal 2010 are examples of its robust manufacturing and supply chain capabilities.  In addition to the Company’s existing defense truck manufacturing facilities in Oshkosh, Wisconsin, in fiscal 2010, the Company assembled M-ATV crew capsules and complete M-ATVs at its JLG manufacturing facility in McConnellsburg, Pennsylvania.

Strong Management Team.  The Company is led by Chairman and Chief Executive Officer (“CEO”) Robert G. Bohn and President and Chief Operating Officer Charles L. Szews who have been employed by the Company since 1992 and 1996, respectively.  Messrs. Bohn and Szews are complemented by an experienced senior management team that has been assembled through internal promotions, new hires and acquisitions.  The management team has successfully executed a strategic reshaping and expansion of its business since 1996, which has positioned the Company to significantly improve its financial and operating performance.

On September 21, 2010, the Company announced that Mr. Bohn had elected to retire as CEO effective December 31, 2010.  In conjunction with Mr. Bohn’s announcement, the Company announced that Mr. Szews had been elected to succeed Mr. Bohn as CEO in addition to Mr. Szews’ role as President, effective January 1, 2011.  Mr. Richard M. Donnelly, a current member of the Company’s Board of Directors, will succeed Mr. Bohn as Chairman of the Board of Directors, effective as of the date of the Company’s Annual Meeting of Shareholders to be held on February 1, 2011, assuming that shareholders reelect Mr. Donnelly as a director at that meeting.

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Business Strategy

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

Pursuing Global Growth.  The Company plans to continue its focus on those specialty vehicle and vehicle body markets where it has or can acquire strong market positions over time and where it believes it can leverage synergies in purchasing, manufacturing, technology and distribution to increase sales and profitability.  Business development teams actively pursue new customers, including those in adjacent markets.  In addition, the Company believes that opportunities exist to develop or increase distribution of its products, particularly in the access equipment segment, in global markets including developing countries in Asia, Eastern Europe, the Middle East and Latin America.  In pursuit of this strategy, the Company opened a 193,000 square foot facility in Tianjin, China in May 2010 to produce JLG access equipment for the Asian market.  After the Company accomplishes its plan to further reduce its debt, it intends to selectively pursue strategic acquisitions, both domestically and internationally, to enhance the Company’s product offerings and expand its international presence in specialty vehicle and vehicle body markets.

Focusing on Total Product Life Cycle Management.  The Company generally sells lines of premium products in each of its markets and seeks to provide superior quality and service in each market to sustain its premium product positioning.  In times of weak economic conditions, the Company believes that providing superior quality and service is even more important as customers look to partner with suppliers they know will be there to help them through such conditions.  Each of the Company’s businesses maintains active programs involving customer outreach, design and manufacturing quality and supplier certification to assure superior product quality.  The Company also achieves high quality customer service through its extensive parts and service support programs, which are generally available to customers 365 days a year in all product lines throughout the Company’s distribution systems.

Embracing Operational Excellence.  The Company seeks to deliver high performance products to customers at both low total product life cycle costs and low acquisition prices.  Historically, the Company has utilized teams of industrial engineers and procurement specialists to re-engineer manufacturing processes and leverage purchasing volumes to meet these objectives.  The Company also utilizes a comprehensive, lean enterprise focus to continue its drive to be a low cost producer in all of its product lines and to deliver low product life cycle costs for its customers.  Lean is a methodology to eliminate non-value added work from a process stream.  During the last few years, the Company has implemented this strategy by:

·                  Combining the Company’s strategic purchasing teams globally into a single organization led by an externally recruited chief procurement officer to capture its full purchasing power across its businesses and to promote low cost country sourcing;

·                  Creating chartered cost reduction teams at all businesses and introducing broad-based training programs;

·                  Creating a new global manufacturing team to further promote quality and lean initiatives; and

·                  Launching the Oshkosh Operating System (“OOS”) to create common practices across the Company to enhance its performance.  The OOS is a system of doing business that is focused on serving and delighting customers by utilizing continuous improvement and lean practices.  The Company believes that the launch of the OOS will enable it to sustain superior performance for its customers, shareholders, employees and other stakeholders.

As a result of this focus, the Company expects to more efficiently utilize its manufacturing facilities and reduce product costs, manufacturing lead times and new product development cycle times over the next several years.

Introducing New Products.  The Company intends to maintain its emphasis on new product development as it seeks to expand sales by leading its core markets in the introduction of new or improved products and new technologies, through internal development, licensing of technology or strategic acquisitions.  The Company actively seeks to commercialize emerging technologies that are capable of expanding customer uses of its products.

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Retaining and Recruiting Superior Talent.  To serve its customers, the Company requires talented and top-performing employees.  The Company uses a comprehensive framework to continuously seek to raise the talent levels across the Company.  Employee talent is regularly assessed to provide visibility to performance, future potential and development activities.  With a continuous focus on the Company’s human capital and projected talent requirements, the Company follows a “plan-do-check-act” model with periodic talent reviews completed at the department, segment and corporate levels, respectively.  Where opportunities are identified to strengthen the Company’s talent depth externally, the Company utilizes a structured candidate interview and selection process, which emphasizes both technical knowledge as well as other priority competencies for each position.  Expanding the diversity of the Company’s global talent is also an area of emphasis through outreach initiatives conducted throughout the organization.  Finally, as the Company’s global footprint expands, it expects to develop locally competitive compensation and benefit programs in the context of the Company’s global compensation and benefits strategy.

Products

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

Defense segment.  The Company has sold products to the DoD for over 80 years.  By successfully responding to the DoD’s changing vehicle requirements, the Company has become the leading manufacturer of severe-duty, heavy- and medium-payload tactical trucks for the DoD.  The Company manufactures vehicles that perform a variety of demanding tasks such as hauling tanks, missile systems, ammunition, fuel, troops and cargo for combat units.  The Company’s proprietary military all-wheel drive product line of heavy-payload tactical trucks includes the HEMTT, the Heavy Equipment Transporter (“HET”), the Palletized Load System (“PLS”), the Common Bridge Transporter and the Logistic Vehicle System Replacement (“LVSR”).  The Company’s proprietary military medium-payload tactical trucks include the Medium Tactical Vehicle Replacement (“MTVR”), the FMTV and the Medium Tactical Truck (“MTT”), a line of lower-cost, severe-duty, medium-payload tactical trucks suitable for less demanding requirements than the MTVR.  The Company’s proprietary M-ATV, including the Company’s recently designed M-ATV ambulance, cargo and utility variants, is the Company’s first major entry into the light tactical vehicle market.  The M-ATV was specially designed with superior survivability as well as extreme off-road mobility for use in small unit combat operations for the current conflict in Afghanistan.  The Company also exports tactical trucks to approved foreign customers.

In October 2008, the DoD awarded the Company a three-year, firm, fixed-priced requirements contract for the continued production of the Family of Heavy Tactical Vehicles (“FHTV”).  Through September 30, 2010, the Company has received orders totaling $5.4 billion under this contract.  The contract includes the production of the HEMTT, HEMTT-ESP, PLS and PLS Trailer as well as associated logistics and configuration management support.

In June 2009, the DoD awarded the Company a sole source contract for M-ATVs and associated aftermarket parts packages.  During fiscal 2010, the Company delivered 7,539 M-ATVs and related aftermarket parts & service under the contract with a combined sales value of $4.48 billion.  As of September 30, 2010, the defense segment had approximately $750 million of backlog related to the M-ATV program, including 322 vehicles.  The Company expects that it will complete deliveries, under orders it has to date, of M-ATVs by November 2010 and associated aftermarket parts by September 2011.

In August 2009, the DoD awarded the Company a contract with an initial order of $280.9 million for the production and delivery of 2,571 trucks and trailers under the U.S. Army’s FMTV Rebuy program.  The FMTV Rebuy program is a five-year requirements contract for the production of up to 23,000 vehicles and trailers as well as support services and engineering.  Through September 30, 2010, the Company has received orders totaling $1.3 billion under this contract.

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

·                  Truck engineering and testing.  DoD and international truck contract competitions require significant defense truck engineering expertise to ensure that truck designs excel under demanding test conditions.  The Company has teams of engineers and draftsmen and engages contract engineers to support current business and truck contract competitions.  These personnel have significant expertise designing new trucks, using sophisticated computer-aided tools, supporting grueling testing programs at test sites and submitting detailed, comprehensive, successful contract proposals.

·                  Proprietary components.  The Company’s patented TAK-4 independent suspension and proprietary transfer case enhance truck off-road performance.  In addition, because these are two of the higher cost components in a truck, the Company has a competitive cost advantage based on the in-house manufacturing of these two truck components.  The Company’s Command Zone tool also simplifies maintenance troubleshooting.

·                  Past performance.  The Company has been building trucks for the DoD for over 80 years.  The Company believes that its past success in delivering reliable, high quality trucks on time, within budget and meeting specifications is a competitive advantage in future defense truck procurement programs.  The Company understands the special contract procedures used by the DoD and other foreign militaries and has developed substantial expertise in contract management and accounting.

·                  Flexible manufacturing.  The Company’s ability to produce a variety of truck models on the same moving assembly line permits it to avoid new facility costs on most new contracts and maintain competitive manufacturing efficiencies. In addition, the Company is able to leverage its global manufacturing scale to supplement its existing defense truck manufacturing facilities in Oshkosh, Wisconsin.  The Company’s decision to co-locate M-ATV production at its JLG manufacturing facility in McConnellsburg, Pennsylvania during fiscal 2010 provided the Company a competitive advantage.

·                  Logistics.  The Company has gained significant experience in the development of operators’ manuals and training and in the delivery of parts and services worldwide in accordance with the DoD’s expectations, which differ materially from commercial practices.  The Company has logistics capabilities to permit the DoD to order parts, receive invoices and remit payments electronically.

Access equipment segment.  JLG manufactures aerial work platforms and telehandlers used in a wide variety of construction, agricultural, industrial, institutional and general maintenance applications to position workers and materials at elevated heights.  In addition, through a long-term license with Caterpillar, JLG produces Caterpillar-branded telehandlers for distribution through the worldwide Caterpillar Inc. dealer network through 2025.

Access equipment customers include equipment rental companies, construction contractors, manufacturing companies, home improvement centers and the U.S. military. JLG’s products are marketed in over 3,500 locations worldwide through independent rental companies and distributors that purchase these products and then rent or sell them and provide service support, as well as through other sales and service branches or organizations in which the Company holds equity positions.

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

Through JerrDan, the Company is a leading manufacturer and marketer of towing and recovery equipment in the U.S.  The Company believes JerrDan is recognized as an industry leader in quality and innovation.  JerrDan offers a complete line of both carriers and wreckers.  In addition to manufacturing equipment, JerrDan provides its customers with one-stop service for carriers and wreckers and generates revenue from the installation of equipment, as well as the sale of chassis and service parts.

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

The Company, through its Oshkosh brand, is among the leaders in sales of ARFF vehicles to domestic and international airports.  These highly-specialized vehicles are required to be in service at most airports worldwide to support commercial airlines in the event of an emergency.  Many of the world’s largest airports, including LaGuardia International Airport, O’Hare International Airport, Hartsfield-Jackson International Airport (Atlanta) and Dallas/Fort Worth International Airport in the U.S. and airports located in Shanghai, Hangzhou, and Beijing, China, and Dubai, United Arab Emirates, are served by the Company’s ARFF vehicles.  The Company believes that the performance and reliability of its ARFF vehicles contribute to the Company’s strong position in this market.

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

Through Medtec, the Company is one of the leading U.S. manufacturers of custom ambulances for private and public transporters and fire departments.  Medtec markets a full line of ambulances including smaller Type II van style ambulances, larger Type I and Type III ambulances, as well as large “Additional Duty” ambulances.  Type I ambulances feature a conventional style, light- or medium-duty chassis with a modular patient transport body mounted separately behind the vehicle cab.  Type II ambulances are smaller van style ambulance units typically targeted to value conscious and transport ambulance services.  Type III ambulances are built on light-duty van chassis with a walk-through opening into the patient transport body which is mounted behind the vehicle cab.

Through OSV, the Company is one of the leading manufactures of mobile medical trailers for North American and European medical centers and service providers.  OSV is the only mobile medical trailer manufacturer certified by all major original equipment manufacturers of medical diagnostic imaging equipment - General Electric Company, Royal Philips Electronics and Siemens AG.  OSV also manufactures mobile command and control centers and simulation units for sale to police forces, fire departments, the DoD and other government agencies in the U.S.

The Company, through its Frontline brand, is a leading manufacturer, system designer and integrator of television broadcast, satellite news gathering and microwave transmission electronic news gathering vehicles for broadcasters, TV stations, broadcast production and radio stations in the Americas and abroad.  The Company’s vehicles have been used to broadcast the NFL Superbowl, the FIFA World Cup and the Olympics.

The Company offers three- to fifteen-year municipal lease financing programs to its fire & emergency segment customers in the U.S. through Oshkosh Equipment Finance, L.L.C., doing business as Oshkosh Capital (“Oshkosh Capital”).  Programs include competitive lease financing rates, creative and flexible finance arrangements and the ease of one-stop shopping for customers’ equipment and financing.  The lease financing transactions are executed through a private label arrangement with an independent third-party finance company.

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

The Company, through Oshkosh/McNeilus Financial Services Partnership (“OMFSP”), an affiliated financial services partnership, offers three- to seven-year tax advantaged lease financing to concrete mixer customers, concrete batch plant customers and commercial waste haulers in the U.S.  Offerings include competitive lease financing rates and the ease of one-stop shopping for customers’ equipment and financing.

Marketing, Sales, Distribution and Service

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

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

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

Defense segment.  The Company sells substantially all of its domestic defense products directly to principal branches of the DoD.  The Company maintains a liaison office in Washington, D.C. to represent its interests with Congress, the offices of the Executive Branch of the U.S. government and other national government agencies and the Pentagon.  The Company locates business development and engineering professionals near the principal U.S. Army and Marine Corps Commands that it serves.  The Company also sells and services defense products to approved foreign governments directly through a limited number of international sales offices, through dealers, consultants and representatives and through the U.S. Foreign Military Sales (“FMS”) program.

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

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

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

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Access equipment segment.  JLG’s products are marketed in over 3,500 locations across six continents through independent rental companies and distributors that purchase JLG products and then rent or sell them and provide service support, as well as through other sales and service branches or organizations in which the Company holds equity positions.  JLG’s sales force is comprised of approximately 100 employees worldwide.  Sales employees are dedicated to specific major customers, channels or geographic regions.  JLG’s sales employees in Europe and the rest of the world are spread among JLG’s approximately 20 international sales and service offices.

JLG produces telehandlers under an exclusive license from Caterpillar Inc. and sells the Caterpillar-branded telehandlers to the worldwide Caterpillar distribution network through a dedicated JLG sales and service team.  JLG also produces a line of telehandlers for the agricultural market under a license from SAME Deutz-Fahr and sells SAME Deutz-Fahr-branded telehandlers directly to SAME Deutz-Fahr’s dealer network.

JLG and an unaffiliated third-party are joint venture partners in RiRent Europe, B.V. (“RiRent”).  RiRent maintains a fleet of access equipment for short-term lease to rental companies throughout most of Europe.  The re-rental fleet provides rental companies with equipment to support short notice rental requirements.  RiRent does not provide rental services directly to end users.

JerrDan markets its carriers and wreckers through its network of approximately 55 independent distributors, supported by JerrDan’s direct sales force.

Fire & emergency segment.  The Company believes the geographic breadth, size and quality of its Pierce fire apparatus sales and service organization are competitive advantages in a market characterized by a few large manufacturers and numerous small, regional competitors.  Pierce’s fire apparatus are sold through over 30 independent sales and service organizations with more than 275 sales representatives in the U.S. and Canada, which combine broad geographical reach with frequency of contact with fire departments and municipal government officials.  These sales and service organizations are supported by approximately 75 product and marketing support professionals and contract administrators at Pierce.  The Company believes frequency of contact and local presence are important to cultivate major, and typically infrequent, purchases involving the city or town council, fire department, purchasing, finance and mayoral offices, among others, that may participate in a fire apparatus bid and selection.  After the sale, Pierce’s nationwide local parts and service capability is available to help municipalities maintain peak readiness for this vital municipal service.  Pierce also sells directly to the DoD and other U.S. government agencies.  Many of the Pierce fire apparatus sold to the DoD are placed in service at U.S. military bases, camps and stations overseas.  Additionally, Pierce sells fire apparatus to numerous international municipal and industrial fire departments through a network of international dealers.  The Company markets its Frontline-branded broadcast vehicles through sales representatives and its Frontline-branded command vehicles through both sales representatives and dealer organizations that are directed at government and commercial customers.

The Company markets its Oshkosh-branded ARFF vehicles through a combination of five direct sales representatives domestically and over 60 representatives and distributors in international markets.  Certain of these international representatives and distributors also handle Pierce products.  The Company has 30 full-time sales and service representatives and 20 distributor locations focused on the sale of snow removal vehicles, principally to airports, but also to municipalities, counties and other governmental entities in the U.S. and Canada.  In addition, the Company maintains offices in Dubai, United Arab Emirates and Beijing, China to support airport product vehicle sales in the Middle East, China and Southeast Asia.

Medtec sells ambulances through more than 20 independent distributor organizations with over 70 representatives focused on sales to the U.S. ambulance market.  OSV markets its mobile medical trailers through five in-house sales and service representatives in the U.S. and one in-house sales and service representative in Europe.

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Commercial segment.  The Company operates 20 distribution centers with over 140 in-house sales and service representatives in the U.S. to sell and service refuse collection vehicles, rear- and front-discharge concrete mixers and concrete batch plants.  These centers are in addition to sales and service activities at the Company’s manufacturing facilities, and they provide sales, service and parts distribution to customers in their geographic regions.  Two of the distribution centers also have paint facilities and can provide significant additional paint and mounting services during peak demand periods.  The Company also uses approximately 30 independent sales and service organizations to market its CON-E-CO branded concrete batch plants.  The Company believes this network represents one of the largest concrete mixer, concrete batch plant and refuse collection vehicle distribution networks in the U.S.

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

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

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

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

IMT distributes its products through approximately 90 dealers with a total of 110 locations worldwide, including approximately 30 international dealers.  International dealers are primarily located in Central and South America, Australia and Asia and are primarily focused on mining and construction markets.

McNeilus owns a 49% interest in Mezcladores Trailers de Mexico, S.A. de C.V. (“Mezcladoras”), a manufacturer of concrete mixers and small refuse collection vehicle bodies for distribution in Mexico and Latin America.  McNeilus also owns a 45% interest in McNeilus Equipamentos Do Brasil LTDA (“McNeilus Brazil”).  McNeilus Brazil manufactures and distributes McNeilus branded concrete mixers and batch plants in the Mercosur region (Argentina, Brazil, Paraguay and Uruguay).

Manufacturing

As of November 18, 2010, the Company manufactures vehicles and vehicle bodies at 48 manufacturing facilities.  To reduce production costs, the Company maintains a continuing emphasis on the development of proprietary components, self-sufficiency in fabrication, just-in-time inventory management, improvement in production flows, interchangeability and simplification of components among product lines, creation of jigs and fixtures to ensure repeatability of quality processes, utilization of robotics, and performance measurement to assure progress toward cost reduction targets.  The Company encourages employee involvement to improve production processes and product quality.

The Company has commenced a comprehensive study of its manufacturing footprint.  During the fourth quarter of fiscal 2010 and the first quarter of fiscal 2011, the Company announced the closure of several manufacturing facilities.  The Company believes that, as a result of streamlining its manufacturing footprint, it will continue to have ample production capacity in its facilities for the next economic expansion.

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The Company educates and trains all employees at its facilities in quality principles. The Company encourages employees at all levels of the Company to understand customer and supplier requirements, measure performance, develop systems and procedures to prevent nonconformance with requirements and produce continuous improvement in all work processes. ISO 9001 is a set of internationally-accepted quality requirements established by the International Organization for Standardization.  ISO 9001 certification indicates that a company has established and follows a rigorous set of requirements aimed at achieving customer satisfaction by preventing nonconformity in design, development, production, installation and servicing of products.  Most of the Company’s facilities are ISO 9001 certified.

Engineering, Research and Development

The Company believes its extensive engineering, research and development capabilities have been key drivers of the Company’s marketplace success.  The Company maintains five facilities for new product development and testing with a staff of approximately 285 engineers and technicians who are dedicated to improving existing products and development and testing of new vehicles, vehicle bodies and components.  The Company prepares multi-year new product development plans for each of its markets and measures progress against those plans each month.

Virtually all of the Company’s sales of fire apparatus, broadcast vehicles and mobile medical trailers require some custom engineering to meet the customer’s specifications and changing industry standards.  Engineering is also a critical factor in defense vehicle markets due to the severe operating conditions under which the Company’s vehicles are utilized, new customer requirements and stringent government documentation requirements.  In the access equipment and commercial segments, product innovation is highly important to meet customers’ changing requirements.  Accordingly, in addition to new product development engineers and technicians, the Company maintains an additional permanent staff of over 430 engineers and engineering technicians, and it regularly outsources some engineering activities in connection with new product development projects.

For fiscal 2010, 2009 and 2008, the Company incurred engineering, research and development expenditures of $109.3 million, $72.7 million and $88.3 million, respectively, portions of which were recoverable from customers, principally the U.S. government.

Competition

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

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

Defense segment.  The Company produces heavy-payload and medium-payload tactical wheeled vehicles for the U.S. and other militaries.  The Company also produces the M-ATV light tactical wheeled vehicle category of MRAP vehicles.  Competition for sales of these vehicles includes BAE Systems plc, Man Group plc, Mercedes-Benz (a subsidiary of Daimler AG), Navistar Defense LLC (a subsidiary of Navistar International Corporation), The Volvo Group, Force Protection Inc. and General Dynamics Corp.  The principal method of competition in the defense segment involves a competitive bid that takes into account factors as determined by the applicable military customer, such as price, product performance, small and disadvantaged business participation, product quality, adherence to bid specifications, production capability, past performance and product support.  Usually, the Company’s truck systems must also pass extensive testing.  The Company believes that its competitive strengths include:  strategic global purchasing capabilities leveraged across multiple business segments; extensive pricing/costing and defense contracting expertise; a significant installed base of vehicles currently in use throughout the world; large-scale, flexible and high-efficiency vertically-integrated manufacturing capabilities; patented and/or proprietary vehicle components such as TAK-4 independent suspension, Oshkosh power transfer cases and Command

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Zone vehicle diagnostics; ability to develop new and improved product capabilities responsive to the needs of its customers; product quality; and after-market parts sales and service capabilities.

The current U.S. Administration has indicated that it supports increased competition for existing defense programs.  The Weapon Systems Acquisition Reform Act also requires competition for defense programs in certain circumstances.  Accordingly, it is possible that the U.S. Army and U.S. Marines will compete programs for which the Company has existing contracts upon their expiration.  The U.S. Army has requested to purchase the design rights to the Company’s vehicles under the FHTV contract.  Likewise, the U.S. Marine Corps has inquired about purchasing the design rights to the MTVR.  Competition for these and other DoD programs could result in future contracts being awarded based upon different competitive factors than those described above and would primarily include price, production capability and past performance.

Access equipment segment.  JLG operates in the global construction, maintenance, industrial and agricultural equipment markets. JLG’s competitors range from some of the world’s largest multi-national construction equipment manufacturers to small single-product niche manufacturers.  Within this global market, competition for sales of aerial work platform vehicles includes Genie Industries, Inc. (a subsidiary of Terex Corporation), Haulotte Group, Skyjack Inc. (a subsidiary of Linamar Corporation), Aichi Corporation (a subsidiary of Toyota Industries Corporation) and over 40 smaller manufacturers.  Global competition for sales of telehandler vehicles includes the Manitou Group, J C Bamford Excavators Ltd., Merlo SpA and Genie Industries, Inc. and over 30 smaller manufacturers.  In addition, JLG faces competition from numerous manufacturers of other niche products such as boom vehicles, cherry pickers, skid steer loaders, mast climbers, straight mast and vehicle-mounted fork-lifts, rough-terrain and all-terrain cranes, vehicle-mounted cranes, portable material lifts, various types of material handling equipment, scaffolding and the common ladder that offer functionality that is similar to or overlaps that of JLG’s products.  Principal methods of competition include brand awareness, product innovation and performance, quality, service and support, product availability and the extent to which a company offers single-source customer solutions.  The Company believes its competitive strengths include: premium brand names; broad and single-source product offerings; product quality; worldwide distribution; safety record; service and support network; global procurement scale; and extensive manufacturing capabilities.

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

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

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

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Medtec is a manufacturer of ambulances, primarily for sale in the U.S.  Medtec’s principal competition for ambulance sales is from Wheeled Coach Industries, American Emergency Vehicles, Horton Emergency Vehicles, Leader Emergency Vehicles (all owned by Allied Specialty Vehicles) and Marque Inc./McCoy-Miller, LLC (owned by Thor Industries).  Principal methods of competition are price, service and product quality.  The Company believes its competitive strengths in the ambulance market include its high-quality, fully customizable and value-priced products.

OSV is a manufacturer of mobile medical trailers and command vehicles.  OSV’s principal competition for mobile medical trailers is from Med Coach, LLC and Ellis and Watts International, Inc.  Principal methods of competition are product quality and availability, price and service.  The Company believes its competitive strengths in OSV’s markets include its high-quality products, excellent relationships with manufacturers of equipment installed in its vehicles and low-cost manufacturing capabilities.

Commercial segment.  The Company produces front- and rear-discharge concrete mixers and batch plants for the Americas under the Oshkosh, McNeilus, CON-E-CO and London brands.  Competition for concrete mixer and batch plant sales includes Continental Manufacturing Co. (a subsidiary of Navistar International Corporation), Terex Corporation and Kimble Manufacturing Company (a subsidiary of The Hines Corporation).  Principal methods of competition are price, service, product features, product quality and product availability.  The Company believes its competitive strengths include: strong brand recognition; large-scale and high-efficiency manufacturing; extensive product offerings; high product quality; a significant installed base of concrete mixers in use in the marketplace; and its nationwide, Company-owned network of sales and service centers.

McNeilus also produces refuse collection vehicles for North America and international markets.  Competitors include The Heil Company (a subsidiary of Dover Corporation), LaBrie Equipment Ltd. and New Way (a subsidiary of Scranton Manufacturing Company, Inc.).  The principal methods of competition are product quality, product performance, service and price.  Increasingly, the Company is competing for municipal business and large commercial business in the Americas, which is based on lowest qualified bid.  The Company believes its competitive strengths in the Americas refuse collection vehicle markets include: strong brand recognition; comprehensive product offerings; a reputation for high-quality products; large-scale and high-efficiency manufacturing; and extensive networks of Company-owned sales and service centers located throughout the U.S.

IMT is a manufacturer of field service vehicles and truck-mounted cranes for the construction, equipment dealer, building supply, utility, tire service and mining industries.  IMT’s principal field service competition is from Auto Crane Company (owned by Gridiron Capital), Stellar Industries, Inc., Maintainer Corporation of Iowa, Inc. and other regional companies.  Competition in truck-mounted cranes comes primarily from European companies including Palfinger AG, Cargotec Corporation and Fassi Group SpA. Principal methods of competition are product quality, price and service.  The Company believes its competitive strengths include its high-quality products, global distribution network and low-cost manufacturing capabilities.

Customers and Backlog

Sales to the U.S. government comprised approximately 72% of the Company’s net sales in fiscal 2010.  No other single customer accounted for more than 10% of the Company’s net sales for this period.  A substantial majority of the Company’s net sales are derived from customer orders prior to commencing production.

The Company’s backlog as of September 30, 2010 decreased 3.8% to $5.40 billion compared to $5.62 billion at September 30, 2009.  Defense segment backlog decreased 3.2% to $4.73 billion at September 30, 2010 compared to $4.88 billion at September 30, 2009 due largely to the Company’s completion of a significant portion of the requirements under its contract to produce M-ATVs, offset in part by additional delivery orders under the FMTV contract, which was awarded to the Company in August 2009.  Access equipment segment backlog increased 82.0% to $197.1 million at September 30, 2010 compared to $108.3 million at September 30, 2009 due to higher demand for aerial work platforms in North America and increased military orders.  Access equipment backlog as of September 30, 2010 and 2009 included $95.7 million and $45.5 million, respectively, relating to telehandler orders from the DoD.  Fire & emergency segment backlog decreased 23.6% to $419.4 million at September 30, 2010 compared to $548.7 million at September 30, 2009 due in part to weakening domestic municipal markets in this business that is cyclical later in an economic downturn and the sale of BAI Brescia Antincendi International S.r.l. (“BAI”) in the first quarter of fiscal 2010.  Backlog at September 30, 2009 included $49.7 million related to BAI.  Commercial segment backlog decreased 21.3% to $58.7 million at September 30,

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2010 compared to $74.6 million at September 30, 2009.  Unit backlog for concrete mixers was up 227.4% compared to very low backlog at September 30, 2009 as a result of increased international orders.  Unit backlog for refuse collection vehicles was down 42.6% compared to September 30, 2009 partly due to the timing of orders from several large waste haulers.

Reported backlog excludes purchase options and announced orders for which definitive contracts have not been executed.  Additionally, backlog excludes unfunded portions of the FHTV, MTVR, indefinite delivery/indefinite quantity (“ID/IQ”), LVSR and FMTV contracts.  Backlog information and comparisons thereof as of different dates may not be accurate indicators of future sales or the ratio of the Company’s future sales to the DoD versus its sales to other customers.  Approximately 22.5% of the Company’s September 30, 2010 backlog is not expected to be filled in fiscal 2011.

Government Contracts

Approximately 72% of the Company’s net sales for fiscal 2010 were made to the U.S. government, a substantial majority of which were under long-term contracts and programs in the defense vehicle market.  Accordingly, a significant portion of the Company’s sales are subject to risks specific to doing business with the U.S. government, including uncertainty of economic conditions, changes in government policies and requirements that may reflect rapidly changing military and political developments, the availability of funds and the ability to meet specified performance thresholds.  Long-term contracts may be conditioned upon continued availability of congressional appropriations, which could be impacted by the uncertainty regarding the future level of U.S. military involvement in Iraq, where troop levels have been significantly reduced, and Afghanistan and federal budget pressures.  Variances between anticipated budget and congressional appropriations may result in a delay, reduction or termination of these contracts.

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

Defense truck contract awards that the Company receives may be subject to protests by competing bidders, which protests, if successful, could result in the DoD revoking part or all of any defense truck contract it awards to the Company and an inability of the Company to recover amounts the Company has expended during the protest period in anticipation of initiating production under any such contract.

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

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

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Suppliers

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

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

Continued global economic weakness has challenged the Company’s supplier base.  A limited number of small suppliers have discontinued business due to the global recession, tight credit conditions or the inability to either absorb cost increases or pass them on to their customers.  In fiscal 2011, additional suppliers could face financial difficulties as a result of the continued global economic weakness and tight credit conditions.  The Company is actively monitoring its suppliers’ financial conditions, but to date has no significant concerns with the financial stability of any major suppliers.

Intellectual Property

Patents and licenses are important in the operation of the Company’s business, as one of management’s objectives is developing proprietary components to provide the Company’s customers with advanced technological solutions at attractive prices.  The Company holds in excess of 500 active domestic and foreign patents.  The Company believes patents for the TAK-4 independent suspension system, which expire between 2016 and 2029, provide the Company with a competitive advantage in the defense and fire & emergency segments.  In the defense segment, the TAK-4 independent suspension system was added to the U.S. Marine Corps’ MTVR and LVSR programs and is a key feature on the Company’s M-ATVs.  The Company believes the TAK-4 independent suspension system provided a performance and cost advantage in the successful competition for the production contracts for these programs.  The Company believes that patents for certain components of its ProPulse hybrid electric drive system, Command Zone electronics and TerraMax autonomous vehicle systems offer potential competitive advantages to product lines across all its segments.  To a lesser extent, other proprietary components provide the Company a competitive advantage in each of the Company’s segments.

The Company has purchased exclusive, renewable licenses for the rights to manufacture and market the Revolution composite concrete mixer drum in the Americas and Europe.  These licenses require the Company to make royalty fee payments to its Australian partner for each Revolution drum sold.  The Revolution composite drum is substantially lighter than a comparable steel drum permitting greater payload capacity and is easier to clean, which together lower the cost of delivered concrete.

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

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

Employees

As of September 30, 2010, the Company had approximately 12,400 employees.  The United Auto Workers union (“UAW”) represented approximately 2,700 production employees at the Company’s Oshkosh, Wisconsin facilities; the Boilermakers, Iron Shipbuilders, Blacksmiths, and Forgers Union (“Boilermakers”) represented approximately 230 employees at the Company’s Kewaunee, Wisconsin facilities; and the International Brotherhood of Teamsters Union (“Teamsters”) represented approximately 80 employees at the Company’s Garner, Iowa facilities.  The Company’s five-year agreement with the UAW extends through September 2011, and the Company’s agreement with the Boilermakers extends through May 2012.  The Company’s three-year agreement with the Teamsters extends through October 2011.  In addition, the majority of the Company’s approximately 1,400 employees located outside the U.S. are represented by separate works councils or unions.  The Company believes its relationship with employees is satisfactory.

Seasonal Nature of Business

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

Industry Segments

Financial information concerning the Company’s industry segments is included in Note 21 to the Consolidated Financial Statements contained in Item 8 of this Form 10-K.

Foreign and Domestic Operations and Export Sales

The Company manufactures products in the U.S., Belgium, Canada, The Netherlands, France, Australia, Romania and China and through investments in joint ventures in Mexico and Brazil for sale throughout the world.  Sales to customers outside of the U.S. were 9.8%, 14.6% and 27.3% of the Company’s consolidated sales for fiscal 2010, 2009 and 2008, respectively.

Financial information concerning the Company’s foreign and domestic operations and export sales is included in Note 21 to the Consolidated Financial Statements contained in Item 8 of this Form 10-K.

Available Information

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

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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. Investors should consider carefully information in this Form 10-K in light of the risk factors described below and the information set forth under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Certain Assumptions.”

Certain of our markets are highly cyclical and the current or any further decline in these markets could have a material adverse effect on our operating performance.

The high levels of sales in our defense business in recent years have been due in significant part to demand for defense trucks, replacement parts and services (including armoring) and truck remanufacturing arising from the conflicts in Iraq and Afghanistan.  Events such as these are unplanned, and we cannot predict how long these conflicts will last or the demand for our products that will arise out of such events.  Accordingly, we cannot provide any assurance that the increased defense business as a result of these conflicts will continue.  Furthermore, our defense business may fluctuate significantly from time to time as a result of the start and completion of new contract awards that we may receive, such as the M-ATV and FMTV contracts.  New vehicle production under the M-ATV contract, which contributed $4.5 billion to our fiscal 2010 sales, is currently scheduled to continue only through November 2010.  In addition, the bailout of U.S. financial institutions, insurance companies and others as well as the U.S. economic stimulus package have put significant pressure on the U.S. federal budget, including the defense budget.  Specifically, the President’s defense budget request for fiscal 2011 includes significantly lower funding for purchases of new military vehicles that we manufacture under our FHTV contract.  Moreover, uncertainty exists regarding the future level of U.S. military involvement in Iraq, where troop levels have been significantly reduced, and in Afghanistan and the related level of defense funding that will be allocated to support this involvement.  It is too early to assess the magnitude of the adverse impact that federal budget pressures, future defense funding for U.S. military involvement in Iraq and Afghanistan and an uncertain DoD tactical wheeled vehicle strategy will have on funding for Oshkosh defense programs, but directionally, we expect such funding to decline.

The decline that we have experienced to date and any further decline in overall customer demand in our access equipment, commercial and fire & emergency markets could have a material adverse effect on our operating performance.  The access equipment market that JLG operates in is highly cyclical and impacted by the strength of economies in general, by prevailing mortgage and other interest rates, by residential and non-residential construction spending, by the ability of rental companies to obtain third party financing to purchase revenue generating assets, by capital expenditures of rental companies in general and by other factors.  The ready-mix concrete market that we serve is highly cyclical and impacted by the strength of the economy generally, by prevailing mortgage and other interest rates, by the number of housing starts and by other factors that may have an effect on the level of concrete placement activity, either regionally or nationally.  Refuse collection vehicle markets are less cyclical and impacted by the strength of economies in general, by municipal tax receipts and by capital expenditures of large waste haulers.  Fire & emergency markets are also cyclical later in an economic downturn and are impacted by the economy generally and municipal tax receipts and capital expenditures.  Concrete mixer and access equipment sales also are seasonal with the majority of such sales occurring in the spring and summer months, which constitute the traditional construction season in the Northern hemisphere.

The global economy continues to experience weakness, which has negatively impacted our sales volumes for our access equipment, commercial and fire & emergency products as compared to historical levels.  Continued weakness in U.S. and European housing starts and non-residential construction spending in most geographical areas of the world are further contributing to the lower sales volumes.  A lack of significant improvement in non-residential construction spending or continued low levels of construction activity generally may cause future weakness in demand for our products.  Furthermore, municipal tax revenues have weakened, which has impacted demand for fire apparatus.  The mobile medical equipment market has been adversely impacted by a reduction in Medicare reimbursement rates and the uncertain health care environment due to the recently enacted health care reform legislation in the U.S.  The towing and recovery equipment market is also being negatively impacted by the global economy and tight credit markets.  We cannot provide any assurance that the global economic weakness and tight credit markets will not continue or become more severe.  In addition, we cannot provide any assurance that any economic recovery will not progress more slowly than our or market expectations.  If the global economic weakness and tight credit markets continue or become more severe, or if any economic recovery progresses more slowly than our or market expectations, then there could be a material adverse effect on our net sales, financial condition, profitability and/or cash flows.

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

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

·                  Our business is susceptible to changes in the U.S. defense budget, which may reduce revenues that we expect from our defense business, especially in light of federal budget pressures in part caused by U.S. economic weakness and the uncertainty that exists regarding the future level of U.S. military involvement in Iraq and Afghanistan and the related level of defense funding that will be allocated to support this involvement and the DoD’s tactical wheeled vehicle strategy.

·                  The U.S. government may not appropriate funding that we expect for our U.S. government contracts, which may prevent us from realizing revenues under current contracts or receiving additional orders that we anticipate we will receive.

·                  Certain of our government contracts for the U.S. Army and U.S. Marines could be suspended, opened for competition or terminated and all such contracts expire in the future and may not be replaced, which could reduce expected revenues and negatively affect margins in our defense segment.  Specifically, we expect that we will complete deliveries of M-ATVs to our customer by November 2010 under orders that we have received to date.  In addition, our FHTV contract is scheduled to expire in October 2011, with vehicle deliveries expected to continue through September 2012.

·                  The current U.S. Administration has indicated that it supports increased competition for existing defense programs. The Weapon Systems Acquisition Reform Act also requires competition for defense programs in certain circumstances.  Accordingly, it is possible that any M-ATV orders for units above the 10,000 unit ceiling provided for in the initial contract award would be competed.  Also, it is possible that the U.S. Army and U.S. Marines will compete programs for which we have existing contracts upon their expiration.  The U.S. Army is currently investigating processes to compete the FHTV program upon the expiration of our contract and has requested to purchase the design rights to our vehicles under this contract.  Likewise, the U.S. Marine Corps inquired about purchasing the design rights to the MTVR.  Competition for these and other DoD programs we currently have could result in future contracts being awarded to another manufacturer or the contracts being awarded to us at a lower price and operating margins than the current contracts.

·                  Defense truck contract awards that we receive may be subject to protests by competing bidders, which protests, if successful, could result in the DoD revoking part or all of any defense truck contract it awards to us and our inability to recover amounts we have expended in anticipation of initiating production under any such contract.

·                  Most of our government contracts, including the FMTV contract, are fixed-price contracts with price escalation factors included for those contracts that extend beyond one year.  Our actual costs on any of these contracts may exceed our projected costs, which could result in profits lower than historically realized or than we anticipate or net losses under these contracts.  In addition, if the timing and size of orders received from the government differ significantly from the assumptions used to price the contract, we may not benefit as expected from contractual price increases, which could also result in lower than anticipated margins or net losses under these contracts.  In particular, we bid the FMTV program at very aggressive margins.  If we incur material cost overruns on this program, or if the government order rate is different than we expected when pricing this contract, then we may not achieve our targeted contract margins or we could incur net losses under this contract.

·                  We are required to spend significant sums on product development and testing, bid and proposal activities and pre-contract engineering, tooling and design activities in competitions to have the opportunity to be awarded these contracts.

·                  Competitions for the award of defense truck contracts are intense, and we cannot provide any assurance that we will be successful in the defense truck procurement competitions in which we participate.

·                  Our defense products undergo rigorous testing by the customer and are subject to highly technical requirements. Any failure to pass these tests or to comply with these requirements could result in unanticipated retrofit costs, delayed acceptance of vehicles, late or no payments under such contracts or cancellation of the contract to provide vehicles to the government.  The U.S. government is currently testing our initial FMTV units.  Any failure to pass FMTV contract testing could subject us to these risks.

·                  Our government contracts are subject to audit, which could result in fines or penalties, or adjustments of our costs and prices under these contracts.

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·                  Our defense truck contracts are large in size and require significant personnel and production resources, and when such contracts end, we must make adjustments to personnel and production resources. In particular, orders for M-ATVs and FMTVs are requiring substantial personnel and production resources at several of our facilities to enable us to maintain the production levels required to meet the delivery requirements for such orders.

·                  We periodically experience difficulties with sourcing sufficient vehicle carcasses to maintain our defense truck remanufacturing schedule, which can create uncertainty and inefficiencies for this area of our business.

An impairment in the carrying value of goodwill and other indefinite-lived intangible assets could negatively affect our operating results.

We have a substantial amount of goodwill and purchased intangible assets on our balance sheet as a result of acquisitions we have completed. Approximately 87% of these intangibles are concentrated in the access equipment segment.  The carrying value of goodwill represents the fair value of an acquired business in excess of identifiable assets and liabilities as of the acquisition date.  The carrying value of indefinite-lived intangible assets represents the fair value of trademarks and trade names as of the acquisition date.  Goodwill and indefinite-lived intangible assets that are expected to contribute indefinitely to our cash flows are not amortized, but instead are evaluated for impairment at least annually, or more frequently if potential interim indicators exist that could result in impairment.  In testing for impairment, if the carrying value of a reporting unit exceeds its current fair value as determined based on the discounted future cash flows of the reporting unit and market comparable sales and earnings multiples, the goodwill or intangible asset is considered impaired and is reduced to fair value via a non-cash charge to earnings.  Events and conditions that could result in impairment include a prolonged period of global economic weakness and tight credit markets, further decline in economic conditions or a slow, weak economic recovery, as well as sustained declines in the price of our common stock, adverse changes in the regulatory environment, adverse changes in interest rates, or other factors leading to reductions in expected long-term sales or profitability.  Determination of the fair value of a reporting unit includes developing estimates which are highly subjective and incorporate calculations that are sensitive to minor changes in underlying assumptions.  Management’s assumptions change as more information becomes available.  Changes in these assumptions could result in an impairment charge in the future, which could have a significant adverse impact on our reported earnings.

We have a significant amount of debt.  Our current debt levels, including the associated financing costs and restrictive covenants, could limit our flexibility in managing our business and increase our vulnerability to general adverse economic and industry conditions.

As a result of the JLG acquisition, we have a significant amount of debt.  Our credit agreement contains financial and restrictive covenants which, among other things, require us to satisfy quarter-end financial ratios, including a leverage ratio, a senior secured leverage ratio and an interest coverage ratio.  Our ability to meet the financial ratios in such covenants may be affected by a number of risks or events, including the risks described in this Annual Report on Form 10-K and events beyond our control.  The indenture governing our senior notes also contains restrictive covenants.  Any failure by us to comply with these restrictive covenants or the financial and restrictive covenants contained in our credit agreement could have a material adverse effect on our financial condition, results of operations and debt service capability.

Our access to debt financing at competitive risk-based interest rates is partly a function of our credit ratings.  Our current long-term debt ratings are BB- with “positive” outlook from Standard & Poor’s Rating Services and Ba3 with stable outlook from Moody’s Investors Service.  A downgrade to our credit ratings could increase our interest rates, could limit our access to public debt markets, could limit the institutions willing to provide us credit facilities, and could make any future credit facilities or credit facility amendments more costly and/or difficult to obtain.

We had approximately $1.3 billion of debt outstanding as of September 30, 2010, which consisted primarily of $150 million drawn under our revolving credit facility maturing in October 2015, a $650 million term loan under our credit agreement maturing in October 2015 and $500 million of senior notes, $250 million of which mature in March 2017 and $250 million of which mature in March 2020.  Our ability to make required payments of principal and interest on our debt will depend on our future performance, which, to a certain extent, is subject to general economic, financial, competitive, political and other factors, some of which are beyond our control.  While we have recently experienced strong earnings and significant debt reduction due largely to M-ATV contract sales in the defense segment, we expect that we will complete vehicle deliveries under that program by November 2010.  In addition, current continued weak economic conditions and tight credit markets could become more severe or prolonged, government funding levels for military programs that we currently have under contract could decline significantly, military programs that we currently have under contract could be competed

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or changes could occur that alter our ability to effectively compete in our markets.  Should one or more of these events occur, conditions could arise which could limit our ability to generate sufficient cash flows or access borrowings to enable us to fund our liquidity needs, further limit our financial flexibility or impair our ability to obtain alternative financing sufficient to repay our debt at maturity.

The covenants that are contained in our credit agreement and the indenture governing our senior notes, our credit rating, our significant amount of debt and the current credit market conditions could have important consequences for our operations, including:

·                  Render us more vulnerable to general adverse economic and industry conditions in our highly cyclical markets or economies generally;

·                  Require us to dedicate a substantial portion of our cash flow from operations to higher interest costs or higher required payments on debt, thereby reducing the availability of such cash flow to fund working capital, capital expenditures, research and development, dividends and other general corporate activities;

·                  Limit our ability to obtain additional financing in the future to fund growth working capital, capital expenditures, new product development expenses and other general corporate requirements;

·                  Limit our ability to enter into additional foreign currency and interest rate derivative contracts;

·                  Make us vulnerable to increases in interest rates as a portion of our debt under our credit agreement is at variable rates;

·                  Limit our flexibility in planning for, or reacting to, changes in our business and the markets we serve;

·                  Place us at a competitive disadvantage compared to less leveraged competitors; and

·                  Limit our ability to pursue strategic acquisitions that may become available in our markets or otherwise capitalize on business opportunities if we had additional borrowing capacity.

Raw material price fluctuations may adversely affect our results.

We purchase, directly and indirectly through component purchases, significant amounts of steel, petroleum-based products and other raw materials annually.  During the past three fiscal years, steel, fuel and other commodity prices have been highly volatile and there are indications that these costs may increase significantly in a future economic recovery or in an environment of a weakening U.S. dollar.  Increases in commodity costs negatively impact the profitability of orders in backlog as prices on those orders are usually fixed.  Furthermore, we largely do business in the defense segment under annual firm, fixed-price contracts with the DoD.  We attempt to limit this risk in the defense segment by obtaining firm pricing from suppliers at the time a contract is awarded.  However, if these suppliers do not honor their contracts, then we could face margin pressure in our defense business.  If we are not able to recover commodity cost increases through price increases to our customers on new orders, then such increases will have an adverse effect on our results of operations.  Additionally, if we are unable to negotiate timely component cost decreases commensurate with any commodity decreases, then such decreases will have an adverse effect on our results of operations.

We may experience losses in excess of our recorded reserves for doubtful accounts, finance receivables, notes receivable and guarantees of indebtedness of others.

As of September 30, 2010, we had consolidated gross receivables of $994.3 million.  In addition, we were a party to agreements in the access equipment segment whereby we have maximum exposure of $103.2 million under guarantees of customer indebtedness to third parties aggregating approximately $252.9 million.  We evaluate the collectability of open accounts, finance receivables, notes receivable and our guarantees of indebtedness of others based on a combination of factors and establish reserves based on our estimates of potential losses.  In circumstances where we believe it is probable that a specific customer will have difficulty meeting its financial obligations, a specific reserve is recorded to reduce the net recognized receivable to the amount we expect to collect, and/or we recognize a liability for a guarantee we expect to pay, taking into account any amounts that we would anticipate realizing if we are forced to repossess the equipment that supports the customer’s financial obligations to us.  We also establish additional reserves based upon our perception of the quality of the current receivables, the current financial position of our customers and past collections experience.  The level of specific reserves recorded in fiscal 2009 of $50.0 million, primarily related to JLG’s customers, was significantly higher than historically recorded as a result of the impact of the global recession and tight credit markets.  Continued economic weakness and tight credit markets may result in additional requirements for specific reserves.  During periods of economic weakness, the collateral underlying our guarantees of indebtedness of customers or receivables can decline sharply, thereby increasing

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our exposure to losses.  We also face a concentration of credit risk as JLG’s ten largest debtors at September 30, 2010 represented approximately 19% of our consolidated gross receivables.  Some of these customers are highly leveraged.  In the future, we may incur losses in excess of our recorded reserves if the financial condition of our customers were to deteriorate further or the full amount of any anticipated proceeds from the sale of the collateral supporting our customers’ financial obligations is not realized.  Our cash flows and overall liquidity may be materially adversely affected if any of the financial institutions that finance our customer receivables become unable or unwilling, due to current economic conditions, a weakening of our or their financial position or otherwise, to continue providing such credit.

Systemic failures that the customer may identify could exceed recorded reserves or negatively affect our ability to win future business with the DoD or other foreign military customers.

As a result of the accelerated timetable from product design to full-scale production, the accelerated production schedule and limited field testing under the M-ATV contract, these vehicles could encounter systemic failures during fielding and use of the vehicles for which we may have responsibility if they occur.  We have established reserves for the estimated cost of such systemic-type repairs based upon historical warranty rates of other defense programs in which we participate.  If systemic issues arise, rectification costs could be in excess of the established reserves.  If the DoD identifies systemic issues, that could also impact our ability to win future business with the DoD or other foreign military customers, which would adversely affect our future earnings and cash flows.

We may incur costs and charges as a result of facilities and operations consolidations, which may also be disruptive to our business.

We have been consolidating facilities and operations in an effort to make our business more efficient.  For example, we closed two JerrDan facilities and integrated JerrDan operations into existing JLG production facilities during the fourth quarter of fiscal 2010 and we announced a move to consolidate the operations of OSV into other fire & emergency segment facilities during the first quarter of fiscal 2011.  We may incur costs and restructuring charges in connection with such consolidations, which would adversely affect our future earnings and cash flows.  Furthermore, such consolidations may be disruptive to our business, which may result in production inefficiencies, product quality issues, late product deliveries or lost orders as we begin production at consolidated facilities, which would adversely impact our sales levels, operating results and operating margins.

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

We have experienced, and may in the future experience, significant disruption or termination of the supply of some of our parts, materials, components and final assemblies that we obtain from sole source suppliers or subcontractors.  We may also incur a significant increase in the cost of these parts, materials, components or final assemblies.  These risks are increased in the current weak economic environment and tight credit conditions.  Such disruptions, terminations or cost increases could delay sales of our vehicles and vehicle bodies and could result in a material adverse effect on our net sales, financial condition, profitability and/or cash flows.  These risks are particularly serious with respect to our suppliers who participate in the automotive industry, from whom we obtain a significant portion of our parts, materials, components and final assemblies.

Our objective is to expand international operations, the conduct of which subjects us to risks that may have a material adverse effect on our business.

Expanding international sales is a part of our growth strategy. Our outlook depends in part upon increases in international orders and sales that may not materialize.  International operations and sales are subject to various risks, including political, religious and economic instability, local labor market conditions, the imposition of foreign tariffs and other trade barriers, the impact of foreign government regulations and the effects of income and withholding taxes, governmental expropriation and differences in business practices.  We may incur increased costs and experience delays or disruptions in product deliveries and payments in connection with international manufacturing and sales that could cause loss of revenues and earnings.  In addition, expansion into foreign markets requires the establishment of distribution networks and may require modification of products to meet local requirements or preferences.  Establishment of distribution networks or modification to the design of our products to meet local requirements and preferences may take longer or be more costly than we anticipate and could have a material adverse effect on our ability to achieve international sales growth.

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As a result of our international operations and sales, we are subject to the Foreign Corrupt Practice Act (“FCPA”) and other laws that prohibit improper payments or offers of payments to foreign governments and their officials for the purpose of obtaining or retaining business.  Our international activities create the risk of unauthorized payments or offers of payments in violation of the FCPA by one of our employees, consultants, sales agents or distributors, because these parties are not always subject to our control.  Any violations of the FCPA could result in significant fines, criminal sanctions against us or our employees, and prohibitions on the conduct of our business, including our business with the U.S. government.  We are also increasingly subject to export control regulations, including, without limitation, the United States Export Administration Regulations and the International Traffic in Arms Regulations.  Unfavorable changes in the political, regulatory and business climate could have a material adverse effect on our net sales, financial condition, profitability and/or cash flows.

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

For the fiscal year ended September 30, 2010, approximately 10% of our net sales were attributable to products sold outside of the United States, including approximately 8% that involved export sales from the United States.  The majority of export sales are denominated in U.S. dollars.  Sales outside the United States are typically made in the local currencies of those countries.  Fluctuations in foreign currency can have an adverse impact on our sales and profits as amounts that are measured in foreign currency are translated back to U.S. dollars.  We have sales of inventory denominated in U.S. dollars to certain of our subsidiaries that have functional currencies other than the U.S. dollar.  The exchange rates between many of these currencies and the U.S. dollar have fluctuated significantly in recent years and may fluctuate significantly in the future.  Such fluctuations, in particular those with respect to the Euro, the Chinese Renminbi, the Canadian dollar and the Australian dollar, may have a material effect on our net sales, financial condition, profitability and/or cash flows and may significantly affect the comparability of our results between financial periods.  Any appreciation in the value of the U.S. dollar in relation to the value of the local currency will adversely affect our revenues from our foreign operations when translated into U.S. dollars.  Similarly, any appreciation in the value of the U.S. dollar in relation to the value of the local currency of those countries where our products are sold will increase our costs in our foreign operations, to the extent such costs are payable in foreign currency, when translated into U.S. dollars.

Work stoppages and other labor matters could adversely affect our business.

As of September 30, 2010, we employed approximately 12,400 people worldwide, including approximately 11,000 employees in the U.S.  Approximately 27% of our employees in the U.S. are represented by labor unions, the largest of which is the UAW in our defense segment.  Our five-year agreement with the UAW expires in September 2011.  We recently approached the UAW with an offer to extend the current contract for one year, until September 2012, under terms similar to the current agreement.  The UAW rejected our offer, and we have not engaged in any further discussions regarding the extension.  Outside of the U.S., we enter into employment contracts and collective agreements in those countries in which such relationships are mandatory or customary.  The provisions of these agreements correspond in each case with the required or customary terms in the subject jurisdiction.  While we have no reason to believe that we will be impacted by work stoppages or other labor matters, we cannot provide any assurance that future issues with our labor unions will be resolved favorably or that we will not encounter future strikes or other types of conflicts with labor unions or our employees.  Any of these factors may have an adverse effect on us or may limit our flexibility in dealing with our workforce.

Disruptions or cost overruns in our global enterprise system implementation could affect our operations.

We recently launched a multi-year project to implement a global enterprise resource planning system to replace many of our existing operating and financial systems.  Such an implementation is a major undertaking, both financially and from a management and personnel perspective.  Should the system not be implemented successfully and within budget, or if the system does not perform in a satisfactory manner, it could disrupt and might adversely affect our operations and results of operations, including our ability, among other things, to timely manufacture products for sale to our customers and to report accurate and timely financial results.

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Changes in regulations could adversely affect our business.

Both our products and the operation of our manufacturing facilities are subject to statutory and regulatory requirements.  These include environmental requirements applicable to manufacturing and vehicle emissions, government contracting regulations and domestic and international trade regulations.  A significant change to these regulatory requirements could substantially increase manufacturing costs or impact the size or timing of demand for our products, all of which could make our business results more variable.

In particular, climate change is receiving increasing attention worldwide.  Many scientists, legislators and others attribute climate change to increased levels of greenhouse gases, including carbon dioxide, which has led to significant legislative and regulatory efforts to limit greenhouse gas emissions.  There are bills pending in Congress that would regulate greenhouse gas emissions through a cap-and-trade system under which emitters would be required to buy allowances to offset emissions of greenhouse gas.  In addition, several states, including states where we have manufacturing plants, are considering various greenhouse gas registration and reduction programs.  Our manufacturing plants use energy, including electricity and natural gas, and certain of our plants emit amounts of greenhouse gas that may be affected by these legislative and regulatory efforts.  Greenhouse gas regulation could increase the price of the electricity we purchase, increase costs for our use of natural gas, potentially restrict access to or the use of natural gas, require us to purchase allowances to offset our own emissions or result in an overall increase in our costs of raw materials, any one of which could increase our costs, reduce our competitiveness in a global economy or otherwise negatively affect our business, operations or financial results.  While additional regulation of emissions in the future appears likely, it is too early to predict how this regulation will ultimately affect our business, operations or financial results.

The mobile medical equipment market continues to be adversely impacted by a reduction in Medicare reimbursement rates and the uncertain health care environment due to the recently enacted health care reform legislation in the U.S.  This legislation or additional legislation could further reduce demand for mobile medical equipment.

Disruptions within our dealer network could adversely affect our business.

Although we sell the majority of our products directly to the end user, we market, sell and service products through a network of independent dealers in the fire & emergency segment and in a limited number of markets for the access and commercial segments.  As a result, our business with respect to these products is influenced by our ability to establish and manage new and existing relationships with dealers.  While we have relatively low turnover of dealers, from time to time, we or a dealer may choose to terminate the relationship as a result of difficulties that our independent dealers experience in operating their businesses due to economic conditions or other factors, or as a result of an alleged failure by us or an independent dealer to comply with the terms of our dealer agreement.  We do not believe our business is dependent on any single dealer, the loss of which would have a sustained material adverse effect upon our business.  However, disruption of dealer coverage within a specific state or other geographic market could cause difficulties in marketing, selling or servicing our products and have an adverse effect on our business, operating results or financial condition.

In addition, our ability to terminate our relationship with a dealer is limited due to state dealer laws, which generally provide that a manufacturer may not terminate or refuse to renew a dealer agreement unless it has first provided the dealer with required notices.  Under many state laws, dealers may protest termination notices or petition for relief from termination actions.  Responding to these protests and petitions may cause us to incur costs and, in some instances, could lead to litigation resulting in lost opportunities with other dealers or lost sales opportunities, which may have an adverse effect on our business, operating results or financial condition.

ITEM 1B.               UNRESOLVED STAFF COMMENTS

The Company has no unresolved staff comments regarding its periodic or current reports from the staff of the SEC that were issued 180 days or more preceding September 30, 2010.

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ITEM 2.          PROPERTIES

The Company believes its equipment and buildings are well maintained and adequate for its present and anticipated needs.  As of November 18, 2010, the Company operated in 48 manufacturing facilities.  The location, size and focus of the Company’s manufacturing facilities are provided in the table below:

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The Company’s manufacturing facilities generally operate five days per week on one or two shifts, except for seasonal shutdowns for one to three week periods.  The Company implemented additional periodic shutdowns in multiple businesses during the past two fiscal years in response to lower demand resulting from the global economic downturn.  The Company expects periodic shutdowns to continue in fiscal 2011.  The Company believes its manufacturing capacity could be significantly increased with limited capital spending by working an additional shift at each facility.

The Company also performs contract maintenance services out of multiple warehousing and service facilities owned and/or operated by the U.S. government and third parties, including locations in the U.S., Japan, Kuwait, Iraq, Afghanistan and multiple other countries in Europe and the Middle East.

In addition to sales and service activities at the Company’s manufacturing facilities, the Company maintains 20 sales and service centers in the U.S.  These facilities are used primarily for sales and service of concrete mixers and refuse collection vehicles.

JLG also leases executive offices in Hagerstown, Maryland and a number of small distribution, engineering, administration or service facilities throughout the world.

ITEM 3.          LEGAL PROCEEDINGS

The Company is subject to environmental matters and legal proceedings and claims, including patent, antitrust, shareholder, 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, the Company believes that the ultimate resolution of all such matters and claims will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Environmental matters.  As part of its routine business operations, the Company disposes of and recycles or reclaims certain industrial waste materials, chemicals, and solvents at third-party disposal and recycling facilities, which are licensed by appropriate governmental agencies.  In some instances, these facilities have been and may be designated by the United States Environmental Protection Agency (“EPA”) or a state environmental agency for remediation.  Under the Comprehensive Environmental Response, Compensation, and Liability Act and similar state laws, each potentially responsible party (“PRP”) that contributed hazardous substances may be jointly and severally liable for the costs associated with cleaning up these sites.  Typically, PRPs negotiate a resolution with the EPA and/or the state environmental agencies.  PRPs also negotiate with each other regarding allocation of the cleanup cost.

The Company had reserves of $1.9 million for environmental matters at September 30, 2010 for losses that were probable and estimable. The amount recorded for identified contingent liabilities is based on estimates.  Amounts recorded are reviewed periodically and adjusted to reflect additional technical and legal information that becomes available. Actual costs to be incurred in future periods may vary from the estimates, given the inherent uncertainties in evaluating certain exposures. Subject to the imprecision in estimating future contingent liability costs, the Company does not expect that any sum it may have to pay in connection with these matters in excess of the amounts recorded will have a materially adverse effect on the Company’s financial position, results of operations or cash flows.

Personal injury actions and other.  At September 30, 2010, the Company had product and general liability reserves of $44.4 million.  Although the final results of all such matters and claims cannot be predicted with certainty, the Company believes that the ultimate resolution of all such matters and claims, after taking into account the liabilities accrued with respect to all such matters and claims, will not have a material adverse effect on the Company’s financial condition, results of operations or cash flows.  Actual results could vary, among other things, due to the uncertainties involved in litigation.

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EXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth certain information as of November 18, 2010 concerning the Company’s executive officers.  All of the Company’s officers serve terms of one year and until their successors are elected and qualified.

Robert G. Bohn.  Mr. Bohn joined the Company in 1992 as Vice President - Operations.  He was appointed President and Chief Operating Officer in 1994.  He was appointed Chief Executive Officer in 1997 and Chairman of the Board in 2000.  Mr. Bohn’s title was changed to Chairman and Chief Executive Officer in 2007.  Mr. Bohn was elected a Director of the Company in 1995.  On September 21, 2010, the Company announced that Mr. Bohn intends to retire from the Company and, in connection with his retirement, to resign as Chief Executive Officer effective December 31, 2010 and as Chairman of the Board effective February 1, 2011.  He is a director of Carlisle Companies Inc., Menasha Corporation and Parker Hannifin Corporation.

Charles L. Szews.  Mr. Szews joined the Company in 1996 as Vice President and Chief Financial Officer.  He served as Executive Vice President and Chief Financial Officer from 1997 until 2007, at which time he was appointed President and Chief Operating Officer.  Effective January 1, 2011, Mr. Szews will assume the position of President and Chief Executive Officer.  Mr. Szews was elected a Director of the Company in 2007.  He is a director of Gardner Denver, Inc.

Bryan J. Blankfield.  Mr. Blankfield joined the Company in 2002 as Vice President, General Counsel and Secretary and was appointed to his present position of Executive Vice President, General Counsel and Secretary in 2003.

Gregory L. Fredericksen.  Mr. Fredericksen joined the Company in 2008 as Senior Vice President, Chief Procurement Officer and was appointed to his present position of Executive Vice President, Chief Procurement Officer in 2010.  He previously served as Executive Director, Global Purchasing and Supply Chain - Current/Future Business, Business Process at General Motors Corporation from 2005 to 2006 and Executive Director, Global Purchasing and Supply Chain - Current/Future Business, Business Process, Structures & Closures at General Motors Corporation from 2006 to 2008.

R. Andrew Hove.  Mr. Hove joined the Company’s defense business in 2009 as Executive Vice President and President, Oshkosh Defense.  He previously served as Vice President - Corporate Internal Audit at BAE Systems from 2008 to 2009.  He served as Vice President of Combat Systems Programs at BAE Systems from 2006 to 2008, where he was responsible for a portfolio of domestic and international ground combat vehicle programs.  Prior to that, he served as Director of Bradley Programs at BAE Systems from 2002 to 2006.  He also serves on the National Defense Industrial Association national board of directors and is a member of its Ethics Committee.

James W. Johnson.  Mr. Johnson joined the Company in 2007 as the Director of Dealer Development for Pierce.  He was appointed to Senior Vice President of Sales and Marketing for Pierce in 2009 and was appointed to his current position in 2010.  He previously served as Dealer Development Manager at Forest River, Inc. (a manufacturer primarily of recreational vehicles) from 2006 to 2007 and was an attorney at a law firm from 2000 to 2006.

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Wilson R. Jones.  Mr. Jones joined the Company in 2005 as Vice President and General Manager of the Airport Products business.  He was appointed President, Pierce in 2007, was appointed Executive Vice President and President, Fire & Emergency Segment in 2008 and was appointed to his current position in July 2010.

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

Josef Matosevic.  Mr. Matosevic joined the Company in 2008 as Vice President of Global Lean Deployment.  He was appointed Vice President of Operations for the Defense Segment in January 2009, was appointed Senior Vice President, Global Operating Systems and Lean Deployment in May 2009, and was appointed to his current position in 2010.  He previously served as Vice President of Global Operations from 2005 to 2007 and Chief Operating Officer from 2007 to 2008 at Wynnchurch Capital/Android Industries (a sub-assembler and sequencer of complex modules for automotive OEM’s).

Frank R. Nerenhausen.  Mr. Nerenhausen joined the Company in 1986 and has served in various assignments, including Vice President Concrete Placement from 2005 to 2008 and Vice President of Concrete & Refuse Sales & Marketing from 2008 to 2010 for McNeilus.  He was appointed to his current position in 2010.

Michael K. Rohrkaste.  Mr. Rohrkaste joined the Company as Vice President - Human Resources in 2003 and was appointed to his current position in 2009.

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

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

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PART II

The information relating to dividends included in Notes 15 and 23 of the Notes to Consolidated Financial Statements contained herein under Item 8 and the information relating to dividends per share contained herein under Item 6 are hereby incorporated by reference in answer to this item.

In July 1995, the Company’s Board of Directors authorized the repurchase of up to 6,000,000 shares of Common Stock.  The Company did not repurchase any shares under this authorization during fiscal 2010.  As of September 30, 2010, the Company had repurchased 2,769,210 shares under this program at a cost of $6.6 million, leaving the Company with authority to repurchase 3,230,790 shares of Common Stock under this program.  There is no expiration date associated with the Board authorization.

Dividends and Common Stock Price

The Company suspended the payment of dividends on its Common Stock effective April 2009.  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 or other factors. In addition, the Company’s credit agreement limits the amount of dividends it may pay to $50 million during any fiscal year; plus the excess of (a) 25% of the cumulative net income of the Company and its consolidated subsidiaries for all fiscal quarters ending after September 27, 2010, over (b) the cumulative amount of all such dividends and other distributions made in any fiscal year ending after such date that exceed $50 million, plus (c) for each of the first four fiscal quarters ending after September 27, 2010, $25 million per fiscal quarter, in each case provided that the leverage ratio (as defined) as of the last day of the most recently ended fiscal quarter was less than 2.0 to 1.0; plus (d) for the period of four fiscal quarters ending September 30, 2011 and for each period of four fiscal quarters ending thereafter, $100 million during such period, in each case provided that the leverage ratio (as defined) as of the last day of the most recently ended fiscal quarter was less than 2.0 to 1.0.  See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” for further discussion about the Company’s financial covenants under its credit agreement.

The Common Stock is listed on the New York Stock Exchange (“NYSE”) under the symbol OSK.  As of November 15, 2010, there were 1,388 holders of record of the Common Stock.  The following table sets forth prices reflecting actual sales of the Common Stock as reported on the NYSE and dividends paid for the periods indicated.

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

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

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The comparisons assume that $100 was invested on September 30, 2005 in each of: the Company’s Common Stock, the Standard & Poor’s MidCap 400 market index and the SIC Code 371 Index.  The total return assumes reinvestment of dividends and is adjusted for stock splits. The fiscal 2010 return listed in the charts below is based on closing prices per share on September 30, 2010.  On that date, the closing price for the Company’s Common Stock was $27.50.

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ITEM 6.          SELECTED FINANCIAL DATA

Fiscal Year

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General

The Company is a leading designer, manufacturer and marketer of a wide range of specialty vehicles and vehicle bodies, including defense trucks, access equipment, fire & emergency vehicles and concrete mixers and refuse collection vehicles.  The Company manufactures defense trucks under the “Oshkosh” brand name and is a leading manufacturer of severe-duty, tactical wheeled vehicles for the DoD.  The Company is a leading global manufacturer of aerial work platforms under the “JLG” brand name.  The Company is among the worldwide leaders in the manufacturing of telehandlers under the “JLG,” “SkyTrak” and “Lull” brand names.  Under the “Jerr-Dan” brand name, the Company is a leading domestic manufacturer and marketer of towing and recovery equipment.  Under the “Pierce” brand name, the Company is among the leading global manufacturers of fire apparatus assembled on both custom and commercial chassis.  Under the “Frontline” brand name, the Company is a leading domestic manufacturer and marketer of broadcast vehicles.  The Company manufactures ARFF and airport snow removal vehicles under the “Oshkosh” brand name and ambulances under the “MEDTEC” brand name.  The Company manufactures mobile medical trailers under the “Oshkosh Specialty Vehicles” and “SMIT” brand names.  Under the “McNeilus,” “Oshkosh,” “London” and “CON-E-CO” brand names, the Company manufactures rear- and front-discharge concrete mixers and portable and stationary concrete batch plants.  Under the “McNeilus” brand name, the Company manufactures a wide range of automated, rear, front, side and top loading refuse collection vehicles.  Under the “IMT” brand name, the Company is a leading domestic manufacturer of field service vehicles and truck-mounted cranes.

During fiscal 2010, in conjunction with the appointment of a new access equipment segment president, the Company transferred operational responsibility of JerrDan from the fire & emergency segment to the access equipment segment.  As a result, JerrDan has been included with the access equipment segment for financial reporting purposes.  Historical information has been reclassified to include JerrDan in the access equipment segment for all periods presented.

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

Defense — tactical trucks and supply parts and services sold to the U.S. military and to other militaries around the world.

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

Fire & emergency — custom and commercial firefighting vehicles and equipment, ARFF vehicles, snow removal vehicles, ambulances and other emergency vehicles primarily sold to fire departments, airports and other governmental units, mobile medical trailers sold to hospitals and third-party medical service providers in the Americas and abroad and broadcast vehicles sold to broadcasters and TV stations in North America and abroad.

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 and field service vehicles and truck-mounted cranes sold to mining, construction and other companies in the U.S. and abroad.

All estimates referred to in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” refer to the Company’s estimates as of November 18, 2010.

Recent Dispositions

In fiscal 2009, the Company sold its European refuse collection vehicle business, Geesink Group B.V., Norba A.B. and Geesink Norba Limited (together, “Geesink”), to a third party for nominal cash consideration.  In spite of aggressive actions during the previous three fiscal years to restructure this business and return it to profitability, the business continued to incur operating losses for the first nine months of fiscal 2009.  The Company believed that its performance could be enhanced by redeploying its resources from Geesink to support the Company’s other businesses.  The Company has reflected the financial

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results of Geesink as discontinued operations in the Consolidated Statements of Operations for all periods presented.  The Company recorded a $33.8 million non-cash, pre-tax gain on the sale.

In October 2009, the Company completed the sale of its 75% interest in BAI, the Company’s European fire apparatus and equipment business, to BAI’s management team for nominal cash consideration.  BAI, which was included in the Company’s fire & emergency segment, had sales of $42.2 million and $58.7 million in fiscal 2009 and 2008, respectively.  The Company recorded a small loss on the sale of BAI in the first quarter of fiscal 2010.  The Company has reflected the financial results of BAI as discontinued operations in the Consolidated Statements of Operations for all periods presented.

In addition, in the fourth quarter of fiscal 2009, the Company reorganized Geesink’s European parent holding company and claimed a worthless stock and bad debt deduction, which resulted in a $71.5 million tax benefit, of which $61.0 million related to Geesink and BAI and was therefore included in discontinued operations.

Executive Overview

Fiscal 2010 was a record year for the Company in terms of sales of $9.8 billion, operating income of $1.4 billion and earnings per share from continuing operations of $8.72.  The Company’s ability to design the urgently needed, life-saving  M-ATV for the DoD, win the program over a number of other competitive bidders and draw on the Company’s resources to ramp-up to production levels of over 1,000 vehicles per month in what has been called one of the fastest and most effective ramp-ups of a defense vehicle program since World War II, was critical to the Company’s fiscal 2010 success.  The M-ATV program accounted for nearly $4.5 billion of the Company’s sales in fiscal 2010.  Based on its strong financial results, the Company was able to reduce debt by more than $735 million during the year and improve its debt-to-total capitalization ratio to less than 50% (See “Liquidity and Capital Resources”).  In addition, the Company refinanced and extended the term of its remaining debt with the issuance of $500 million senior notes in March 2010 and completion of a new credit agreement in September 2010.  While most of the Company’s non-defense markets remained weak in fiscal 2010, particularly in the United States and Europe, the access equipment market experienced a modest recovery in the second half of the fiscal year.

In light of continued weak markets, the Company has remained focused on cash generation and cost reduction.  The Company announced plans over the last four months to consolidate a number of facilities to take advantage of opportunities to streamline production and reduce costs.  The Company believes these actions will better position the Company for profitable growth as the economy recovers.  At the same time, the Company is investing in the business to position itself for the future.  During fiscal 2010, the Company added lean, supply chain, materials management and quality control talent in support of its Oshkosh Operating System initiative.  The Company also completed pre-production readiness activities associated with the start-up of production under the Company’s five-year requirements contract with the DoD to supply FMTVs.  In addition, in fiscal 2010 the Company began manufacturing at its plant in Tianjin, China to produce JLG access equipment for the Asian/Pacific markets.

While not providing specific quantitative guidance, the Company believes fiscal 2011 sales, operating income and net income will be lower than fiscal 2010 as fiscal 2010 benefited from almost $4.5 billion of M-ATV-related sales.  M-ATV production and shipments are scheduled to conclude in the first quarter of fiscal 2011.  The Company expects that sales in its defense segment will be over $4 billion in fiscal 2011 compared to $7.2 billion in fiscal 2010 when the Company was producing 7,539 M-ATVs.  As of September 30, 2010, the defense segment had approximately $3.5 billion of fiscal 2011 sales in backlog, including approximately $750 million of vehicles and aftermarket parts and service revenue related to the M-ATV program.  Most of the M-ATV-related backlog is expected to be sold in the first half of fiscal 2011.  The Company estimates that FMTV sales will comprise approximately 15% of defense segment sales in fiscal 2011 as it ramps up production during the year.  The Company believes that FMTV margins will be near break even in fiscal 2011, before increasing in subsequent years from production efficiencies and the execution of cost reduction strategies.  The Company believes fiscal 2011 margins for the defense segment in total will be in the low double digit range.

The Company believes that the access equipment segment will record year-over-year gains in sales to external customers in fiscal 2011 based on expected higher equipment replacement demand in North America along with continued growth in emerging markets.  The Company expects sales in the access equipment segment to be strongest in the second and third quarters of fiscal 2011 due to product seasonality.  The Company expects that higher sales levels will generate operating income margins in the low single digits in the access equipment segment in fiscal 2011.  The Company does not expect that the access equipment segment will have significant intersegment sales to the defense segment in fiscal 2011.

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The Company believes fire & emergency segment sales will be flat to down compared to fiscal 2010 due primarily to weak municipal spending on fire apparatus.  The Company expects that margins in this segment will be lower than fiscal 2010 due to anticipated shifts in customer buying patterns to units with lower content, increased new product development spending, overhead costs absorbed over fewer units and a more challenging pricing environment, especially internationally.

The Company believes that the commercial segment will generate modestly higher sales in fiscal 2011.  While the Company expects concrete mixer sales will remain relatively flat domestically, it believes international concrete mixer sales will continue to grow.  The Company believes that refuse collection vehicle sales will be modestly higher in fiscal 2011 as the Company anticipates customers, most of whom are private haulers and not municipalities, will look to replace older units in their fleets.  The Company expects that intersegment sales of components to the defense segment will decrease in fiscal 2011 and that operating income margins in the commercial segment will be flat to down compared to fiscal 2010 operating income margins due to lower intersegment defense sales and expected reduction of LIFO inventory benefits.

The Company expects that corporate expenses will be higher in fiscal 2011 than in fiscal 2010 as a result of increased investments to strengthen the Company’s market leadership and to take advantage of future growth opportunities by investing in information systems, infrastructure and people.  The Company plans to continue to deliver debt reduction in fiscal 2011, although the Company anticipates that debt reduction will be more modest than in fiscal 2010.  The Company also expects significantly lower interest expense due to lower debt levels and a lower interest rate spread as a result of its new credit agreement completed in September 2010.  The Company expects that fiscal 2011 capital expenditures will approach $100 million, but may reach $125 million if the economic recovery strengthens.  The Company believes that its fiscal 2011 effective income tax rate will approximate 38%.

Results of Operations

Consolidated Net Sales — Three Years Ended September 30, 2010

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

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

Fiscal 2010 Compared to Fiscal 2009

Consolidated net sales increased 87.4% to $9.84 billion in fiscal 2010 compared to fiscal 2009.  The increase in sales was primarily the result of the M-ATV contract in the defense segment.

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Defense segment net sales increased 176.0% to $7.16 billion in fiscal 2010 compared to fiscal 2009.  The increase was primarily due to the sale of 7,539 M-ATV units and related aftermarket parts & service under a contract under which initial production began in the fourth quarter of fiscal 2009.  Combined vehicle and parts & service sales related to the M-ATV program totaled $4.48 billion in fiscal 2010, an increase of $4.38 billion over fiscal 2009 levels.

Access equipment segment net sales increased 145.8% to $3.01 billion in fiscal 2010 compared to fiscal 2009.  Sales in fiscal 2010 included $1.73 billion in intersegment M-ATV-related sales to the defense segment.  Sales to external customers increased 12.0% to $1.27 billion in fiscal 2010 compared to fiscal 2009.  Sales to external customers reflected relatively strong demand for new equipment in North America (up 20.8%) and Latin America (up 129.6%), offset in part by substantially lower demand in Europe, Africa and the Middle East (down 28.9%).  In addition to the higher volumes experienced during fiscal 2010, the increase in sales as compared to fiscal 2009 was the result of improved pricing, primarily related to long-term U.S. government contacts with annual price escalation clauses ($20.1 million), favorable foreign currency exchange rates ($17.4 million) and improved product mix ($15.1 million).

Fire & emergency segment net sales decreased 12.1% to $916.0 million in fiscal 2010 compared to fiscal 2009.  The decrease in sales reflected lower shipments of fire apparatus ($116.3 million reduction) due to softer demand attributable to declining municipal budgets in the U.S. and continued weak demand for mobile medical equipment ($25.9 million reduction).  In addition, the mobile medical equipment market has been adversely impacted by a reduction in Medicare reimbursement rates and the uncertain health care environment in the U.S.

Commercial segment net sales increased 5.4% to $622.1 million in fiscal 2010 compared to fiscal 2009.  A $29.9 million increase in intersegment production of heavy tactical vehicle components for the defense segment and a 38.6% increase in concrete placement vehicle shipments off of historical lows were offset by a 3.5% decrease in domestic refuse collection vehicle shipments.

Fiscal 2009 Compared to Fiscal 2008

Consolidated net sales decreased 23.6% to $5.25 billion in fiscal 2009 compared to fiscal 2008.  The decrease in sales was a result of unprecedented reductions in the Company’s access equipment segment sales and continued reductions in the Company’s commercial segment sales as a result of the global recession and credit crisis.  These decreases were partially offset by increased sales in the Company’s defense and domestic fire apparatus businesses.

Defense segment net sales increased 37.2% to $2.59 billion in fiscal 2009 compared to fiscal 2008.  The increase was attributable to higher unit volume of heavy-payload tactical vehicles and parts & service sales volume to fulfill the continuing requirements of the Company’s largest customer, the DoD.  Shipments of new and remanufactured heavy-payload tactical vehicles to the U.S. Army increased by nearly 1,000 units, or 24%, in fiscal 2009 compared to the prior year (a $454.7 million increase, including additional armoring).  Defense segment parts & service sales in fiscal 2009 benefited from the sale and installation of reducible-height armor kits for MTVR trucks for the U.S. Marine Corps (up $73.2 million) and sales of TAK-4 independent suspension systems to third-party MRAP vehicle original equipment manufacturers ($88.3 million).

Access equipment net sales decreased 61.9% to $1.23 billion in fiscal 2009 compared to fiscal 2008.  Sales reflected substantially lower demand globally arising from recessionary economies and tight credit markets.  European, African and Middle East and North American new machine unit volumes each declined approximately 75% in fiscal 2009, while the rest of world equipment unit volumes were down about 50%.  Access equipment sales in fiscal 2009 included $86.7 million of intercompany sales to the defense segment related to the M-ATV program.

Fire & emergency segment net sales increased 3.3% to $1.04 billion in fiscal 2009 compared to fiscal 2008.  Sales price increases to offset higher raw material costs and improved product mix (combined $44.4 million) as well as increased shipments of domestic fire apparatus ($30.3 million) were offset in part by a shift in component production and corresponding intersegment sales out of the fire & emergency segment to the commercial segment ($27.9 million).

Commercial segment net sales declined 29.3% to $0.59 billion in fiscal 2009 compared to fiscal 2008.  The decrease in sales was the result of a 60.4% decline in sales of concrete placement products related to lower unit volume due to continued weakness in U.S. residential and nonresidential construction activity, and a 15.0% decrease in refuse collection vehicle sales.  The decline in refuse collection vehicle sales was the result of lower international unit volume ($30.0 million) as well as the timing of deliveries to large fleet customers (down $8.0 million).  This decline was offset in part by higher intersegment sales

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as a result of a shift in component production and corresponding sales out of the fire & emergency segment to the commercial segment ($59.5 million).

Consolidated Cost of Sales — Three Years Ended September 30, 2010

Fiscal 2010 Compared to Fiscal 2009

Consolidated cost of sales increased to $7.87 billion, or 80.0% of sales, in fiscal 2010 compared to $4.55 billion, or 86.6% of sales, in fiscal 2009.  The 660 basis point decrease in cost of sales as a percentage of sales was due to the impact of M-ATV-related sales (260 basis points), relatively fixed overhead costs spread over a higher sales base (190 basis points), improved pricing (90 basis points) and lower material costs (60 basis points).

Fiscal 2009 Compared to Fiscal 2008

Consolidated cost of sales decreased to $4.55 billion, or 86.6% of sales, in fiscal 2009 compared to $5.71 billion, or 83.0% of sales, in fiscal 2008.  The 360 basis point increase in cost of sales as a percentage of sales was due to higher material costs (200 basis points), primarily within the access equipment segment, and relatively fixed overhead costs spread over a lower sales base (150 basis points).

Consolidated Operating Income (Loss) — Three Years Ended September 30, 2010

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

Fiscal 2010 Compared to Fiscal 2009

The Company reported consolidated operating income of $1.39 billion, or 14.2% of sales, in fiscal 2010 compared to an operating loss of $979.5 million, or 18.6% of sales, in fiscal 2009.  Operating results in fiscal 2010 and 2009 included non-cash charges for the impairment of goodwill and other long-lived assets of $25.6 million and $1.19 billion, respectively.  The lower impairment charges in fiscal 2010 combined with significantly improved defense segment and access equipment segment performance led to the increase in operating income.

In accordance with the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350-20, Goodwill, the Company reviews goodwill annually for impairment, or more frequently if potential interim indicators exist that could result in impairment.  In the first quarter of fiscal 2010, OSV experienced a significant decline in sales, operating income and orders for future sales.  The decline was primarily attributable to concerns of OSV’s mobile medical trailer customers regarding current and future levels of Medicare reimbursement for services performed by these customers.  As a result of these significant declines, the reporting unit revised its forecast to incorporate these reductions which resulted in a significant decline in projected fiscal 2010 sales and operating income.  The severity of the decline in the updated forecast, the then current Medicare reimbursement environment and the uncertainty at the time regarding the potential for passage of a health care reform bill, further impacting Medicare reimbursement rates, resulted in an interim indicator of impairment of the reporting unit that required the Company to perform additional impairment testing of goodwill and long-lived intangible assets at this reporting unit in the first quarter of fiscal 2010.  Following the impairment testing, the Company recorded impairment charges for goodwill and other long-lived intangible assets of $23.3 million during the first quarter of fiscal 2010.  In addition, in conjunction with the Company’s fiscal 2010 annual fourth quarter

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impairment testing, as a result of reduced expectations relative to one of the commercial segment’s product lines, the Company identified and recorded an impairment of an intangible trade name asset in its commercial segment in the amount of $2.3 million.

Defense segment operating income increased 227.5% to $1.32 billion, or 18.4% of sales, in fiscal 2010 compared to $403.3 million, or 15.5% of sales, in fiscal 2009.  The increase in operating income as a percent of sales compared to the prior year reflected the impact of the significant increase in production and sales volume related to the M-ATV contract (280 basis points) and relatively fixed engineering and administrative expenses relative to higher sales (140 basis points), offset in part by a reduced LIFO benefit (40 basis points).

The access equipment segment reported operating income of $97.3 million, or 3.2% of sales, in fiscal 2010 compared to an operating loss of $1.16 billion in fiscal 2009, which included $941.7 million in non-cash impairment charges for goodwill and other long-lived assets.  The improvement in operating results was primarily the result of the impact of the impairment charges recorded in prior year results and recognition of $1.73 billion of intersegment M-ATV sales at mid-single digit margins in fiscal 2010 as the Company leveraged under-utilized facilities and its workforce from its access equipment segment to produce crew capsules for the M-ATV and to perform vehicle assembly.  Operating results related to sales to external customers in the access equipment segment in fiscal 2010 also benefited from lower material costs ($48.2 million), lower provisions for credit losses ($34.3 million), improved pricing ($22.9 million) and favorable foreign currency exchange rates ($13.1 million).

The fire & emergency segment reported operating income of $57.6 million, or 6.3% of sales, in fiscal 2010 compared to $51.2 million, or 4.9% of sales, in fiscal 2009.  Fiscal 2010 and 2009 included $23.3 million and $64.2 million in non-cash impairment charges for goodwill and other long-lived assets, respectively.  The improvement in operating results was due to a decrease in impairment charges in fiscal 2010, offset in part by the impact of lower sales volumes across the segment ($32.2 million).

The commercial segment generated operating income of $19.4 million, or 3.1% of sales, in fiscal 2010 compared to an operating loss of $183.7 million in fiscal 2009, which included $184.3 million in non-cash impairment charges for goodwill and other long-lived assets.  The increase in operating results in fiscal 2010 was largely due to the recognition of impairment charges in the prior year and profit on increased intersegment manufacturing activities for the defense segment, offset in part by lower LIFO inventory benefits ($3.6 million).

Corporate operating expenses increased $9.4 million to $99.0 million in fiscal 2010 compared to fiscal 2009 largely due to higher incentive compensation, including higher share-based compensation expense.

Intersegment profit eliminations of $1.9 million in fiscal 2010 resulted from profit on intersegment sales between segments (largely M-ATV-related sales between access equipment and defense).  To the extent that the purchasing segment has not sold the inventory to an outside party, the profits earned by the selling segment are eliminated from consolidated earnings through intersegment profit eliminations.

Consolidated selling, general and administrative expenses increased $59.5 million to $489.8 million, or 5.0% of sales, in fiscal 2010 compared to $430.3 million, or 8.2% of sales, in fiscal 2009.  The increase in selling, general and administrative expenses as compared to the prior year was primarily related to higher compensation ($56.8 million), including higher incentive and share-based compensation expense, higher consulting services ($10.9 million), and promotional expenses ($8.0 million) and other increases associated with the higher sales, offset in part by lower provisions for doubtful accounts and credits losses ($34.7 million).  Consolidated selling, general and administrative expenses as a percentage of sales decreased largely due to substantially higher defense segment sales on a relatively fixed cost base.

Fiscal 2009 Compared to Fiscal 2008

The Company incurred a consolidated operating loss of $979.5 million in fiscal 2009 as compared to operating income of $617.4 million in fiscal 2008.  The operating loss in fiscal 2009 was driven by $1.19 billion of pre-tax, non-cash charges for the impairment of goodwill and other long-lived assets.  Sharply lower sales volume in the access equipment and commercial segments also contributed to the decrease in operating results in fiscal 2009.

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At February 28, 2009, given the sustained decline in the price of the Company’s Common Stock subsequent to the Company’s fiscal 2008 year end when its share price approximated book value, depressed order rates during the second quarter which historically has been a strong period for orders in advance of the North American construction season, as well as further deterioration in credit markets and the macro-economic environment, the Company determined that the appropriate triggers had been reached to perform additional impairment testing on goodwill and its long-lived intangible assets.  Accordingly, the Company conducted an assessment of the fair values of the Company’s reporting units.  The results of that assessment indicated that impairment charges to the values of goodwill and other long-lived assets were required in the Company’s access equipment, fire & emergency and commercial segments.

Defense segment operating income increased 52.1% to $403.3 million, or 15.5% of sales, in fiscal 2009 compared to $265.2 million, or 14.0% of sales, in fiscal 2008.  The increase in operating income as a percent of sales compared to fiscal 2008 reflected better absorption of fixed costs (200 basis points), improved performance on service work (50 basis points) and favorable LIFO inventory adjustments (60 basis points), offset in part by a larger percentage of sales under lower margin contracts during fiscal 2009 (140 basis points).

The access equipment segment incurred an operating loss of $1,159.1 million, including $941.7 million in pre-tax, non-cash impairment charges for goodwill and other long-lived assets, in fiscal 2009 compared to operating income of $363.1 million in fiscal 2008.  In addition to the non-cash impairment charges, the decline in operating income was due to the impact of sharply lower sales volume ($480.6 million), sale of units comprised of higher cost materials purchased in fiscal 2008 when steel costs were high ($59.7 million), and an increase in the provision for credit losses ($47.8 million).  The impact of these factors was reduced by lower operating expenses ($68.2 million) as a result of aggressive cost reduction efforts.

Fire & emergency segment operating income decreased 45.1% to $51.2 million, or 4.9% of sales, in fiscal 2009 compared to $93.4 million, or 9.3% of sales in fiscal 2008.  Impairment charges of $64.2 million for goodwill and other long-lived assets more than offset otherwise favorable operating results for the segment due to favorable product mix ($6.0 million) as well as lower operating expenses throughout the segment as a result of cost reduction initiatives ($8.0 million).

The commercial segment incurred an operating loss in fiscal 2009 of $183.7 million, including $184.3 million in pre-tax, non-cash impairment charges for goodwill and other long-lived assets, compared to operating income of $4.7 million in fiscal 2008.  The decrease in operating results was due to the non-cash impairment charges and the impact of sharply lower concrete placement products sales volume ($31.6 million), offset in part by reductions in operating expenses ($20.5 million) due to cost reduction efforts and a LIFO inventory benefit of $5.9 million due to significant reductions in inventory levels.

Corporate operating expenses decreased $18.9 million to $89.6 million in fiscal 2009 compared to fiscal 2008 largely due to focused cost reduction efforts, including lower outside professional services, ($10.3 million) and travel costs ($5.1 million).

Intersegment profit eliminations of $1.6 million in fiscal 2009 resulted from profit on intersegment sales between segments (largely M-ATV-related sales between access equipment and defense).  To the extent that the purchasing segment has not sold the inventory to an outside party, the profits earned by the selling segment are eliminated from consolidated earnings through intersegment profit eliminations.

Consolidated selling, general and administrative expenses decreased $52.6 million to $430.3 million, or 8.2% of sales, in fiscal 2009 compared to $482.9 million, or 7.0% of sales, in fiscal 2008 as a result of focused cost reduction efforts, including reductions in staffing, salary reductions and furloughs, the elimination of 401(k) contribution matches (combined decrease of $47.9 million) and other cost reductions.  Selling, general and administrative expenses in fiscal 2009 included provisions for credit losses of $50.0 million, or 0.9% of sales, compared to $0.6 million in fiscal 2008, with the increase in provisions principally concentrated in the access equipment segment due to the effects of the global recession on the financial health of its customers and due to reductions in the underlying collateral value of the equipment.

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Non-Operating Income — Three Years Ended September 30, 2010

Fiscal 2010 Compared to Fiscal 2009

Interest expense net of interest income decreased $23.9 million to $183.6 million in fiscal 2010 compared to fiscal 2009 largely as a result of the effect of lower borrowings, offset in part by the write-off of debt issuance costs as a result of the repayment of debt.  Average debt outstanding decreased from $2.55 billion during fiscal 2009 to $1.61 billion in fiscal 2010.  In addition to debt reduction as a result of strong cash flow generation during the past two years, the Company completed a common stock offering early in the fourth quarter of fiscal 2009, which provided $358.1 million of net proceeds that the Company applied to reduce outstanding debt.  Included within fiscal 2010 and 2009 interest expense were $20.4 million and $5.0 million related to the write-off of deferred financing fees associated with the early repayment and refinancing of debt, respectively.

Other miscellaneous income of $1.0 million in fiscal 2010 related primarily to net foreign currency transaction gains.

Fiscal 2009 Compared to Fiscal 2008

Interest expense net of interest income increased $2.9 million to $207.5 million in fiscal 2009 compared to fiscal 2008 on lower average outstanding debt, as a result of higher interest rates after the effective date of an amendment of the Company’s credit agreement.  In March 2009, the Company amended its credit agreement to provide additional room under its financial covenants to address lower earnings as a result of the impact of the global recession and tight credit markets.  In connection with this amendment, interest rate spreads were increased significantly.

Other miscellaneous income of $8.8 million in fiscal 2009 related primarily to net foreign currency transaction gains.

Provision for (Benefit from) Income Taxes — Three Years Ended September 30, 2010

Fiscal 2010 Compared to Fiscal 2009

The Company recorded a $414.3 million tax provision in fiscal 2010, or 34.2% of pre-tax income from continuing operations, compared to a tax benefit of $12.6 million, or 1.1% of pre-tax losses from continuing operations, in fiscal 2009.  The fiscal 2010 income tax provision benefited from a favorable income tax audit settlement (130 basis point reduction in effective tax rate), which was partially offset by the reduction in accrued benefits previously recorded under a European tax incentive due to losses in the period (60 basis point increase in rate).  The fiscal 2010 effective income tax rate was unfavorably impacted by a pre-tax intangible asset impairment charge of $25.6 million, of which only $6.3 million was deductible.  The 2009 income tax benefit of $412.4 million at the U.S. federal rate on the pre-tax loss of $1,178.2 million was reduced by the tax effect of non-deductible intangible asset impairment charges of $394.0 million and $17.3 million related to the reduction in accrued benefits previously recorded under a European tax incentive due to cumulative losses incurred during the period, offset in part by a worthless stock deduction benefit of $10.5 million.

Fiscal 2009 Compared to Fiscal 2008

The Company recorded a $12.6 million tax benefit in fiscal 2009, or 1.1% of pre-tax losses, compared to tax expense of $121.2 million, or 30.0% of pre-tax earnings, for fiscal 2008.  The expected tax benefit for fiscal 2009, at the U.S. federal rate of 35%, of $412.4 million was reduced by the tax effect of non-deductible impairment charges of $394.0 million and by $17.3 million related to the reduction in accrued benefits previously recorded under a European tax incentive due to losses incurred during the period, offset in part by a worthless stock deduction and other tax benefits.

Equity in Earnings (Losses) of Unconsolidated Affiliates — Three Years Ended September 30, 2010

Fiscal 2010 Compared to Fiscal 2009

Equity in losses of unconsolidated affiliates of $4.3 million in fiscal 2010 and $1.4 million in fiscal 2009 primarily represented the Company’s equity interest in a lease financing partnership, a commercial entity in Mexico and a joint venture in Europe.  Earnings for these entities decreased due to lower financing activity and increased credit losses due to the impact of continued global economic weakness.

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Fiscal 2009 Compared to Fiscal 2008

The Company recorded a loss of $1.4 million related to equity in unconsolidated affiliates in fiscal 2009 compared to $6.3 million of income in fiscal 2008.  The Company has equity interests in a lease financing partnership, a commercial entity in Mexico and a joint venture in Europe.  Earnings for these entities decreased due to lower financing activity and increased credit losses due to the impact of the global recession.

Analysis of Discontinued Operations — Three Years Ended September 30, 2010

In July 2009, the Company completed the sale of its ownership in Geesink to a third party for nominal cash consideration.  Geesink, a European refuse collection vehicle manufacturer, was previously included in the Company’s commercial segment.  Due to the reclassification of $92.0 million of cumulative translation adjustments out of equity, the Company recorded a pre-tax gain on the sale of Geesink of $33.8 million in the fourth quarter of fiscal 2009.  In October 2009, the Company sold its 75% ownership interest in BAI to BAI’s management team for nominal cash consideration.  BAI, a European fire apparatus manufacturer, was previously included in the Company’s fire & emergency segment.  In the fourth quarter of fiscal 2009, the Company made a “check-the-box” election to treat its foreign subsidiary, the European holding company parent of Geesink and BAI, as a disregarded entity for U.S. federal income tax purposes.  As a result of the election, the Company recorded a $71.5 million worthless stock and bad debt income tax benefit, of which $61.0 million has been recorded in discontinued operations.  The historical results of operations of Geesink and BAI have been reclassified in the Company’s Consolidated Statements of Operation and are included in “Income (loss) from discontinued operations,” for all periods presented.

Fiscal 2009 Compared to Fiscal 2008

Sales related to discontinued operations were $180.2 million in fiscal 2009, a decrease of 30.9% as compared to the prior year.  The decrease in sales related to discontinued operations in fiscal 2009 as compared with fiscal 2008 was primarily related to the inclusion of Geesink sales for nine months in fiscal 2009 versus twelve months in fiscal 2008 as a result of the sale of that business in July 2009.  Discontinued operations sustained an operating loss of $26.7 million in fiscal 2009 compared to an operating loss of $211.1 million in fiscal 2008.  In fiscal 2009 and 2008, the Company recorded pre-tax, non-cash charges for the impairment of intangible assets of $9.6 million and $174.2 million, respectively, related to discontinued operations.  These charges were largely non-deductible for local tax purposes.  In the fourth quarter of fiscal 2009, the Company made a “check-the-box” election to treat its foreign subsidiary, the European holding company parent of Geesink and BAI, as a disregarded entity for U.S. federal income tax purposes.  As a result of the election, the Company recorded a $71.5 million worthless stock and bad debt income tax benefit, of which $61.0 million has been recorded in discontinued operations.

Liquidity and Capital Resources

Financial Condition at September 30, 2010

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

Debt decreased $735.9 million during fiscal 2010 largely as a result of the Company’s use of cash flows from operations and from reductions in available cash to retire outstanding debt.  The Company’s primary use of cash flow from operations continues to be debt reduction.  The Company entered into a performance-based payments agreement for the M-ATV program during the fourth quarter of fiscal 2009.  This agreement provided milestone-based payments to fund the procurement of parts and assembly of M-ATVs.  The Company continued to receive significant performance-based payments

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under this agreement during the first half of fiscal 2010, which contributed to cash on hand of $339.0 million at September 30, 2010.  As the Company nears the conclusion of the M-ATV contract, performance-based payments previously received under that contract are being utilized to pay suppliers.

In addition to cash and cash equivalents, the Company had $363.8 million of unused available capacity under the Revolving Credit Facility (as defined in “Liquidity”) as of September 30, 2010.  Borrowings under the Revolving Credit Facility could, as discussed below, be limited by the financial covenants contained within the Credit Agreement (as defined in “Liquidity”).

Cash Flows

Operating Cash Flows

The Company generated $619.7 million of cash from operating activities during fiscal 2010 compared to $898.9 million during fiscal 2009.  Fiscal 2009 cash generation from operating activities benefited from receipt of customer advances on the M-ATV contract in advance of full rate of production, which did not occur until fiscal 2010.  Also, the Company was able to generate cash from contractions of net working capital during fiscal 2009 due to the declining sales environment.  Cash generated (used) from changes in significant working capital accounts were as follows (in millions):

Changes in receivables, inventories and accounts payable in fiscal 2010 were primarily driven by M-ATV production and sales in the defense segment.  The increase in accounts payable in fiscal 2010 was primarily the result of the fast ramp up of M-ATV production with the Company turning inventory quickly relative to standard payment terms to suppliers.  In September 2009, after receipt of a large M-ATV performance-based payment, the Company prepaid a supplier $100.0 million for inventory deliveries scheduled to occur beginning in fiscal 2010.  The prepayments were recorded within “Other current assets” in the Consolidated Balance Sheet at September 30, 2009.  The prepayment was fully utilized during fiscal 2010.  As the Company nears the conclusion of the M-ATV contract, performance-based payments previously received under that contract are being utilized to pay suppliers, resulting in the decrease in customer advances in fiscal 2010.  Changes in receivables, inventories and accounts payable in fiscal 2009 were primarily driven by the decrease in non-defense segment sales.  A significant increase in customer advances in fiscal 2009 was due to the timing of performance-based payments from the U.S. government on the FHTV contract awarded in October 2008 and, more significantly, the M-ATV contract awarded in June 2009.

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

Consolidated days sales outstanding (defined as “Trade Receivables” divided by “Net Sales” for the most recent quarter multiplied by 90 days) increased from 33 days at September 30, 2009 to 37 days at September 30, 2010.  The increase in days sales outstanding was primarily due to a higher percentage of parts & services sales in the defense segment, which typically have longer collection periods.  Days sales outstanding on non-defense sales was 49 days at September 30, 2010, up from 48 days at September 30, 2009.  Consolidated inventory turns (defined as “Cost of Sales” divided by the average “Inventory”

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at the past five quarter end periods) increased from 4.3 times at September 30, 2009 to 6.7 times at September 30, 2010 generally as a result of the high M-ATV production volume during fiscal 2010.

Investing Cash Flows

Cash flows relating to investing activities consist primarily of cash used for capital expenditures.  Net cash used in investing activities in fiscal 2010 was $83.9 million compared to $56.1 million in fiscal 2009.  Capital spending, excluding equipment held for rental, of $83.2 million in fiscal 2010 was up $37.0 million compared to capital spending in fiscal 2009.  In fiscal 2009, the Company sharply curtailed capital spending in response to the global recession.  The Company increased capital spending in fiscal 2010 as a result of additional capital spending required for the FMTV contract and expanding manufacturing operations into China.  In fiscal 2011, the Company expects capital spending to again approach $100 million, but it could reach $125 million if the economic recovery strengthens.

Financing Cash Flows

Financing activities consists primarily of proceeds from the issuance of long-term debt and equity, and cash used by financing activities consists primarily of repayments of indebtedness.  Financing activities resulted in a net use of cash of $722.5 million during fiscal 2010 compared to $408.1 million during fiscal 2009.  The increase in cash used by financing activities was largely due to the completion of a public equity offering of 14,950,000 shares of Common Stock at a price of $25.00 per share in fiscal 2009.  The Company used the $358.1 million in net proceeds from the offering to repay debt under the Company’s credit agreement.  The Company repaid $720.9 million of debt in fiscal 2010 compared to $731.6 million in fiscal 2009.  In addition, a larger number of stock option holders elected to exercise stock options during the third quarter of fiscal 2010 resulting in cash generation of $19.0 million.  The Company suspended dividend payments effective April 2009 resulting in a reduction of $14.9 million in the amount of funds used for dividends in fiscal 2010 compared to the prior year.

Liquidity

The Company’s primary sources of liquidity are the cash flow generated from operations, availability under the $550.0 million Revolving Credit Facility (as defined below) and available cash and cash equivalents.  In addition to cash and cash equivalents of $339.0 million, the Company had $363.8 million of unused availability under the Revolving Credit Facility as of September 30, 2010.  These sources of liquidity are needed to fund the Company’s working capital requirements, debt service requirements and capital expenditures.  Based on the Company’s current outlook for fiscal 2011, the Company expects to have sufficient liquidity to finance its operations over the next twelve months.

Senior Secured Credit Agreement

On September 27, 2010, the Company replaced its existing credit agreement with a new senior secured credit agreement with various lenders (the “Credit Agreement”).  The Credit Agreement provides for (i) a revolving credit facility (“Revolving Credit Facility”) that matures in October 2015 with an initial maximum aggregate amount of availability of $550 million and (ii) a $650 million term loan (“Term Loan”) facility due in quarterly principal installments of $16.25 million commencing December 31, 2010 with a balloon payment of $341.25 million due at maturity in October 2015.  At September 30, 2010, borrowings of $150.0 million and outstanding letters of credit of $36.2 million reduced available capacity under the Revolving Credit Facility to $363.8 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 to the extent such subsidiaries borrow directly under the Credit Agreement.  Subject to certain exceptions, the Credit Agreement is secured 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 and each subsidiary guarantor.

The Company must pay (1) an unused commitment fee ranging from 0.40% to 0.50% per annum of the average daily unused portion of the aggregate revolving credit commitments under the Credit Agreement and (2) a fee ranging from 1.125% to 3.50% per annum of the maximum amount available to be drawn for each letter of credit issued and outstanding under the Credit Agreement.

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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.  At September 30, 2010, the interest spread on the Revolving Credit Facility and Term Loan was 300 basis points.  The weighted-average interest rate on borrowings outstanding at September 30, 2010, prior to consideration of the interest rate swap, was 3.26% for the Revolving Credit Facility and 3.29% for the Term Loan.

To manage a portion of the Company’s exposure to changes in LIBOR-based interest rates on its variable-rate debt, the Company entered into an amortizing interest rate swap agreement in 2007 that effectively fixes the interest payments on a portion of the Company’s variable-rate debt.  The swap, which has a termination date of December 6, 2011, effectively fixes the LIBOR-based interest rate on the debt in the amount of the notional amount of the swap at 5.105% plus the applicable spread based on the terms of the Credit Agreement (8.105% at September 30, 2010).  The notional amount of the swap at September 30, 2010 was $750 million and reduces to $250 million on December 6, 2010.  Neither the Company nor the counterparty is required to collateralize its obligations under these swaps.  The Company is exposed to loss if the counterparty defaults.  However, as of the date of this filing, the counterparty is a large Aa1 rated global financial institution and the Company believes that the risk of default is remote.

Covenant Compliance

The Credit Agreement contains various restrictions and covenants, including requirements that the Company maintain certain financial ratios at prescribed levels and restrictions on the ability of the Company and certain of its subsidiaries to consolidate or merge, create liens, incur additional indebtedness, dispose of assets, consummate acquisitions and make investments in joint ventures and foreign subsidiaries.  The Credit Agreement contains the following financial covenants:

·                  Leverage Ratio: A maximum leverage ratio (defined as, with certain adjustments, the ratio of the Company’s consolidated indebtedness to consolidated net income 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 to 1.0.

·                  Interest Coverage Ratio: A minimum interest coverage ratio (defined as, with certain adjustments, the ratio of the Company’s 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 EBITDA) of the following:

Fiscal Quarter Ending

Based on the Company’s current outlook for fiscal 2011, the Company expects to be able to meet the financial covenants contained in the Credit Agreement over the next twelve months.

Additionally, with certain exceptions, the Credit Agreement limits the ability of the Company to pay dividends and other distributions.  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 in an aggregate amount not exceeding the sum of:

(i)    $50 million during any fiscal year; plus

(ii)   the excess of (a) 25% of the cumulative net income of the Company and its consolidated subsidiaries for all fiscal quarters ending after September 27, 2010, over (b) the cumulative amount of all such dividends and other distributions made in any fiscal year ending after such date that exceed $50 million; plus

(iii)  for each of the first four fiscal quarters ending after September 27, 2010, $25 million per fiscal quarter, in each case provided that the leverage ratio (as defined) as of the last day of the most recently ended fiscal quarter was less than 2.0 to 1.0; plus

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(iv)      for the period of four fiscal quarters ending September 30, 2011 and for each period of four fiscal quarters ending thereafter, $100 million during such period, in each case provided that the leverage ratio (as defined) as of the last day of the most recently ended fiscal quarter was less than 2.0 to 1.0.

Senior Notes

In March 2010, the Company issued $250.0 million of 8¼% unsecured senior notes due March 1, 2017 and $250.0 million of 8½% unsecured senior notes due March 1, 2020 (collectively, the “Senior Notes”).  The Senior Notes were issued pursuant to an indenture (the “Indenture”) among the Company, the subsidiary guarantors named therein and a trustee.  The Indenture contains customary affirmative and negative covenants.  The Company has the option to redeem the Senior Notes due 2017 and Senior Notes due 2020 for a premium after March 1, 2014 and March 1, 2015, respectively.  Certain of the Company’s subsidiaries fully, unconditionally, jointly and severally guarantee the Company’s obligations under the Senior Notes.  See Note 22 of the Notes to Consolidated Financial Statements for separate financial information of the subsidiary guarantors.

Refer to Note 11 of the Notes to Consolidated Financial Statements for additional information regarding the Company’s outstanding debt as of September 30, 2010.

Contractual Obligations, Commercial Commitments and Off-Balance Sheet Arrangements

Following is a summary of the Company’s contractual obligations and payments due by period following September 30, 2010 (in millions):

(1)          Interest calculated based upon the interest rate in effect at September 30, 2010.

(2)          The Company utilizes blanket purchase orders to communicate expected annual requirements to many of its suppliers or contractors.  Requirements under blanket purchase orders generally do not become “firm” until four weeks prior to the Company’s scheduled unit production.  The purchase obligations amount included above represents the value of commitments considered firm, plus the value of all outstanding subcontracts.

(3)          Due to the uncertainty of the timing of settlement with taxing authorities, the Company is unable to make reasonably reliable estimates of the period of cash settlement of unrecognized tax benefits for the remaining uncertain tax liabilities.  Therefore, $52.1 million of unrecognized tax benefits as of September 30, 2010 have been excluded from the Contractual Obligations table above.  See Note 19 of the Notes to Consolidated Financial Statements for additional information regarding the Company’s unrecognized tax benefits as of September 30, 2010.

The Company incurs contingent limited recourse liabilities with respect to customer financing activities in the access equipment segment. For additional information relative to guarantees, see Note 12 of the Notes to Consolidated Financial Statements.

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