OSHKOSH CORP (Form: 10-Q, Received: 04/28/2016 14:52:44)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016


o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 1-31371

Oshkosh Corporation

(Exact name of registrant as specified in its charter)



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



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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes o No

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.



Large accelerated filer ý		Accelerated filer o
Non-accelerated filer o		Smaller reporting company o

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

As of April 21, 2016 , 73,366,717 shares of the registrant’s Common Stock were outstanding.

Table of Contents

OSHKOSH CORPORATION

FORM 10-Q INDEX

FOR THE QUARTER ENDED MARCH 31, 2016



		Page
PART I - FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	1

	Condensed Consolidated Statements of Income for the	1
	Three Months and Six Months Ended March 31, 2016 and 2015

	Condensed Consolidated Statements of Comprehensive Income for the	2
	Three Months and Six Months Ended March 31, 2016 and 2015

	Condensed Consolidated Balance Sheets at	3
	March 31, 2016 and September 30, 2015

	Condensed Consolidated Statements of Shareholders' Equity for the	4
	Six Months Ended March 31, 2016 and 2015

	Condensed Consolidated Statements of Cash Flows for the	5
	Six Months Ended March 31, 2016 and 2015

	Notes to Condensed Consolidated Financial Statements	6

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	32

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	43

ITEM 4.	CONTROLS AND PROCEDURES	43

PART II - OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	44

ITEM 1A.	RISK FACTORS	44

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	47

ITEM 4.	MINE SAFETY DISCLOSURES	48

ITEM 6.	EXHIBITS	49

SIGNATURES		50

EXHIBIT INDEX		51

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OSHKOSH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share amounts; unaudited)



	Three Months Ended March 31,						Six Months Ended March 31,
	2016			2015			2016			2015
Net sales	$	1,524.3		$	1,554.2		$	2,776.3		$	2,907.5
Cost of sales	1,265.0			1,278.4			2,334.2			2,402.0
Gross income	259.3			275.8			442.1			505.5

Operating expenses:
Selling, general and administrative	154.7			152.8			294.0			303.3
Amortization of purchased intangibles	13.2			13.3			26.4			26.8
Total operating expenses	167.9			166.1			320.4			330.1
Operating income	91.4			109.7			121.7			175.4

Other income (expense):
Interest expense	(15.6		)	(28.8		)	(30.2		)	(43.2		)
Interest income	0.5			0.6			1.0			1.4
Miscellaneous, net	(1.0		)	1.3			(1.0		)	—
Income before income taxes and equity in earnings of unconsolidated affiliates	75.3			82.8			91.5			133.6
Provision for income taxes	20.3			29.5			22.0			45.7
Income before equity in earnings of unconsolidated affiliates	55.0			53.3			69.5			87.9
Equity in earnings of unconsolidated affiliates	1.1			1.3			1.2			1.4
Net income	$	56.1		$	54.6		$	70.7		$	89.3

Earnings per share attributable to common shareholders:
Basic	$	0.77		$	0.70		$	0.96		$	1.14
Diluted	0.76			0.69			0.95			1.12

Cash dividends declared per share on Common Stock	$	0.19		$	0.17		$	0.38		$	0.34

The accompanying notes are an integral part of these financial statements

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OSHKOSH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions; unaudited)



	Three Months Ended March 31,						Six Months Ended March 31,
	2016			2015			2016		2015
Net income	$	56.1		$	54.6		$	70.7	$	89.3
Other comprehensive income (loss), net of tax:
Employee pension and postretirement benefits	0.4			0.5			0.9		0.3
Currency translation adjustments	18.9			(53.1		)	7.7		(76.0		)
Change in fair value of derivative instruments	(0.2		)	—			—		—
Total other comprehensive income (loss), net of tax	19.1			(52.6		)	8.6		(75.7		)
Comprehensive income	$	75.2		$	2.0		$	79.3	$	13.6

The accompanying notes are an integral part of these financial statements

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OSHKOSH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share amounts; unaudited)



	March 31,			September 30,
	2016			2015
Assets
Current assets:
Cash and cash equivalents	$	38.4		$	42.9
Receivables, net	1,046.0			964.6
Inventories, net	1,373.4			1,301.7
Deferred income taxes, net	54.5			52.2
Prepaid income taxes	23.9			22.8
Other current assets	54.0			45.1
Total current assets	2,590.2			2,429.3
Investment in unconsolidated affiliates	16.8			16.2
Property, plant and equipment, net	478.3			475.8
Goodwill	1,006.0			1,001.1
Purchased intangible assets, net	580.2			606.7
Other long-term assets	79.7			83.9
Total assets	$	4,751.2		$	4,613.0

Liabilities and Shareholders' Equity
Current liabilities:
Revolving credit facilities and current maturities of long-term debt	$	155.7		$	83.5
Accounts payable	597.7			552.8
Customer advances	525.9			440.2
Payroll-related obligations	123.6			116.6
Other current liabilities	241.6			265.0
Total current liabilities	1,644.5			1,458.1
Long-term debt, less current maturities	845.0			855.0
Deferred income taxes, net	88.6			91.7
Other long-term liabilities	298.7			297.1
Commitments and contingencies
Shareholders' equity:
Preferred Stock ($.01 par value; 2,000,000 shares authorized; none issued and outstanding)	—			—
Common Stock ($.01 par value; 300,000,000 shares authorized; 92,101,465 shares issued)	0.9			0.9
Additional paid-in capital	779.5			771.5
Retained earnings	2,059.2			2,016.5
Accumulated other comprehensive loss	(135.8		)	(144.4		)
Common Stock in treasury, at cost (18,951,082 and 16,647,031 shares, respectively)	(829.4		)	(733.4		)
Total shareholders’ equity	1,874.4			1,911.1
Total liabilities and shareholders' equity	$	4,751.2		$	4,613.0

The accompanying notes are an integral part of these financial statements

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OSHKOSH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(In millions, except per share amounts; unaudited)



	Common Stock		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock in Treasury at Cost			Total
Balance at September 30, 2014	$	0.9	$	758.0		$	1,840.1		$	(69.2	)	$	(544.8	)	$	1,985.0
Net income	—		—			89.3			—			—			89.3
Employee pension and postretirement benefits, net of tax of $0.2	—		—			—			0.3			—			0.3
Currency translation adjustments, net	—		—			—			(76.0		)	—			(76.0		)
Cash dividends ($0.34 per share)	—		—			(26.7		)	—			—			(26.7		)
Repurchases of Common Stock	—		—			—			—			(88.1		)	(88.1		)
Exercise of stock options	—		(0.3		)	—			—			3.7			3.4
Stock-based compensation expense	—		11.4			—			—			—			11.4
Excess tax benefit from stock-based compensation	—		4.0			—			—			—			4.0
Payment of earned performance shares	—		(7.4		)	—			—			7.4			—
Shares tendered for taxes on stock-based compensation	—		—			—			—			(4.8		)	(4.8		)
Other	—		(0.4		)	—			—			0.6			0.2
Balance at March 31, 2015	$	0.9	$	765.3		$	1,902.7		$	(144.9	)	$	(626.0	)	$	1,898.0

	Common Stock		Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock in Treasury at Cost			Total
Balance at September 30, 2015	$	0.9	$	771.5		$	2,016.5		$	(144.4	)	$	(733.4	)	$	1,911.1
Net income	—		—			70.7			—			—			70.7
Employee pension and postretirement benefits, net of tax of $0.6	—		—			—			0.9			—			0.9
Currency translation adjustments, net	—		—			—			7.7			—			7.7
Cash dividends ($0.38 per share)	—		—			(28.0		)	—			—			(28.0		)
Repurchases of Common Stock	—		—			—			—			(100.1		)	(100.1		)
Exercise of stock options	—		(0.3		)	—			—			2.2			1.9
Stock-based compensation expense	—		11.4			—			—			—			11.4
Payment of earned performance shares	—		(2.6		)	—			—			2.6			—
Shares tendered for taxes on stock-based compensation	—		—			—			—			(1.5		)	(1.5		)
Other	—		(0.5		)	—			—			0.8			0.3
Balance at March 31, 2016	$	0.9	$	779.5		$	2,059.2		$	(135.8	)	$	(829.4	)	$	1,874.4

The accompanying notes are an integral part of these financial statements

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OSHKOSH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions; unaudited)



	Six Months Ended March 31,
	2016			2015
Operating activities:
Net income	$	70.7		$	89.3
Depreciation and amortization	63.7			64.0
Stock-based compensation expense	11.4			11.4
Deferred income taxes	(7.0		)	(4.7		)
Foreign currency transaction losses	0.3			10.7
Gain on sale of assets	(6.3		)	(5.0		)
Other non-cash adjustments	(0.2		)	12.8
Changes in operating assets and liabilities	(38.1		)	(249.2		)
Net cash provided (used) by operating activities	94.5			(70.7		)

Investing activities:
Additions to property, plant and equipment	(40.3		)	(69.8		)
Additions to equipment held for rental	(22.7		)	(15.5		)
Proceeds from sale of equipment held for rental	26.1			13.4
Other investing activities	(1.0		)	(1.5		)
Net cash used by investing activities	(37.9		)	(73.4		)

Financing activities:
Net increase (decrease) in short-term debt	(21.3		)	13.7
Proceeds from issuance of debt (original maturities greater than three months)	273.5			315.0
Repayment of debt (original maturities greater than three months)	(190.0		)	(325.0		)
Repurchases of Common Stock	(100.1		)	(88.1		)
Dividends paid	(28.0		)	(26.7		)
Debt issuance costs	—			(15.4		)
Proceeds from exercise of stock options	1.9			3.4
Excess tax benefit from stock-based compensation	0.9			4.1
Net cash used by financing activities	(63.1		)	(119.0		)

Effect of exchange rate changes on cash	2.0			2.7
Decrease in cash and cash equivalents	(4.5		)	(260.4		)
Cash and cash equivalents at beginning of period	42.9			313.8
Cash and cash equivalents at end of period	$	38.4		$	53.4

Supplemental disclosures:
Cash paid for interest	$	26.6		$	27.0
Cash paid for income taxes	37.3			23.5

The accompanying notes are an integral part of these financial statements

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments (which include normal recurring adjustments, unless otherwise noted) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP") have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. These Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements and notes thereto included in the Annual Report on Form 10-K of Oshkosh Corporation for the year ended September 30, 2015. The interim results are not necessarily indicative of results for the full year. “Oshkosh” refers to Oshkosh Corporation not including its subsidiaries and “the Company” refers to Oshkosh Corporation and its subsidiaries. Certain reclassifications have been made to the fiscal 2015 financial statements to conform to the fiscal 2016 presentation.

2. New Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) , which clarifies the principles for recognizing revenue. This guidance requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09, as amended by ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations and ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, becomes effective for fiscal years and interim periods beginning after December 15, 2017, with adoption permitted one year earlier. The Company is currently evaluating the impact of ASU 2014-09 on the Company’s financial statements and has not yet determined its method of adoption.

In April 2015, the FASB issued ASU 2015-03, Interest - Imputation of Interest (Topic 835-30), Simplifying the Presentation of Debt Issuance Costs . ASU 2015-03 is part of the FASB’s initiative to simplify accounting standards. The guidance requires an entity to recognize debt issuance costs related to a debt liability as a direct deduction from the carrying amount of the debt liability in the balance sheet, thereby increasing the effective rate of interest, as opposed to a deferred cost. The Company will be required to adopt ASU 2015-03 as of October 1, 2016. The Company does not expect the adoption of ASU 2015-03 to have a material impact on the Company's financial statements.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330), Simplifying the Measurement of Inventory . ASU 2015-11 is part of the FASB’s initiative to simplify accounting standards. The guidance requires an entity to recognize inventory within the scope of the standard at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company will be required to adopt ASU 2015-11 as of October 1, 2017. The Company is currently evaluating the impact of ASU 2015-11 on the Company’s financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes. ASU 2015-17 is part of the FASB's initiative to reduce complexity of financial statements. The guidance removes the requirement to separate and classify deferred income tax liabilities and assets into current and noncurrent amounts and requires an entity to classify all deferred tax liabilities and assets as noncurrent. The Company will be required to adopt ASU 2015-17 as of October 1, 2017. The Company does not expect the adoption of ASU 2015-17 to have a material impact on the Company's financial statements.

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which is expected to increase transparency and comparability among organizations . The standard requires lessees to reflect most leases on their balance sheet as lease liabilities with a corresponding right-of-use asset, while leaving presentation of lease expense in the statements of comprehensive income largely unchanged. The standard also eliminates the real-estate specific provisions that exist under current U.S. GAAP and modifies the classification criteria and accounting lessors must apply to sales-type and direct financing leases. The standard is effective for fiscal years and interim periods beginning after December 15, 2018 and early adoption is permitted. The Company is evaluating the impact of ASU 2016-02 on the Company's financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 is part of the FASB’s initiative to simplify accounting standards. The standard requires that all tax effects of share-based payments at settlement (or expiration) be recorded in the income statement at the time the tax effects arise. The standard also clarifies that cash flows resulting from share-based payments be reported as operating activities within the statement of cash flows, permits employers to withhold shares upon settlement of an award to satisfy an employee's tax liability up to the employee's maximum individual tax rate in the relevant jurisdiction without resulting in liability classification of the award and permits entities to make an accounting policy election to estimate or use actual forfeitures when recognizing the expense of share-based compensation. The Company will be required to adopt ASU 2016-09 as of October 1, 2017. The Company is evaluating the impact of ASU 2016-09 on the Company's financial statements.

3. Receivables

Receivables consisted of the following (in millions):



	March 31,			September 30,
	2016			2015
U.S. government:
Amounts billed	$	38.6		$	63.1
Costs and profits not billed	34.0			66.8
	72.6			129.9
Other trade receivables	941.8			782.3
Finance receivables	6.5			7.4
Notes receivable	33.0			29.6
Other receivables	35.4			57.7
	1,089.3			1,006.9
Less allowance for doubtful accounts	(21.9		)	(20.3		)
	$	1,067.4		$	986.6

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



	March 31,		September 30,
	2016		2015
Current receivables	$	1,046.0	$	964.6
Long-term receivables (included in Other long-term assets)	21.4		22.0
	$	1,067.4	$	986.6

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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



	Finance Receivables						Notes Receivable
	March 31, 2016			September 30, 2015			March 31, 2016			September 30, 2015
Aging of receivables that are past due:
Greater than 30 days and less than 60 days	$	—		$	—		$	—		$	—
Greater than 60 days and less than 90 days	—			—			—			—
Greater than 90 days	—			—			—			—

Receivables on nonaccrual status	1.1			1.1			22.2			22.9
Receivables past due 90 days or more and still accruing	—			—			—			—

Receivables subject to general reserves	1.5			6.2			—			—
Allowance for doubtful accounts	—			(0.1		)	—			—
Receivables subject to specific reserves	5.0			1.2			33.0			29.6
Allowance for doubtful accounts	(0.4		)	—			(13.2		)	(12.7		)

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

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

Notes Receivable: Notes receivable include amounts related to refinancing of trade accounts and finance receivables. As of March 31, 2016 , approximately 71% of the notes receivable balance outstanding was due from three parties. The Company routinely evaluates the creditworthiness of its customers and establishes reserves where the Company believes collectability is no longer reasonably assured. Certain notes receivable are collateralized by a security interest in the underlying assets and/or other assets owned by the debtor. The Company may incur losses in excess of recorded allowances if the financial condition of its customers were to deteriorate or the full amount of any anticipated proceeds from the sale of the collateral supporting its customers' financial obligations is not realized.

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

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Receivables subject to specific reserves also include loans that the Company has modified in troubled debt restructurings as a concession to customers experiencing financial difficulty. To minimize the economic loss, the Company may modify certain finance and notes receivable. Modifications generally consist of restructured payment terms and time frames in which no payments are required. At March 31, 2016 , restructured finance and notes receivables were $0.4 million and $14.7 million , respectively. Losses on troubled debt restructurings were not significant during the three and six months ended March 31, 2016 and 2015 , respectively.

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



	Three Months Ended March 31, 2016										Three Months Ended March 31, 2015
	Finance		Notes		Trade and Other			Total			Finance		Notes			Trade and Other			Total
Allowance for doubtful accounts at beginning of period	$	0.1	$	12.6	$	6.1		$	18.8		$	—	$	13.1		$	8.1		$	21.2
Provision for doubtful accounts, net of recoveries	0.3		0.1		2.3			2.7			—		0.1			1.4			1.5
Charge-off of accounts	—		—		(0.1		)	(0.1		)	—		—			(0.3		)	(0.3		)
Foreign currency translation	—		0.5		—			0.5			—		(1.1		)	(0.1		)	(1.2		)
Allowance for doubtful accounts at end of period	$	0.4	$	13.2	$	8.3		$	21.9		$	—	$	12.1		$	9.1		$	21.2



	Six Months Ended March 31, 2016										Six Months Ended March 31, 2015
	Finance		Notes		Trade and Other			Total			Finance		Notes			Trade and Other			Total
Allowance for doubtful accounts at beginning of period	$	0.1	$	12.7	$	7.5		$	20.3		$	—	$	13.6		$	8.2		$	21.8
Provision for doubtful accounts, net of recoveries	0.3		0.3		1.2			1.8			—		0.1			1.2			1.3
Charge-off of accounts	—		—		(0.4		)	(0.4		)	—		—			(0.2		)	(0.2		)
Foreign currency translation	—		0.2		—			0.2			—		(1.6		)	(0.1		)	(1.7		)
Allowance for doubtful accounts at end of period	$	0.4	$	13.2	$	8.3		$	21.9		$	—	$	12.1		$	9.1		$	21.2

4. Inventories

Inventories consisted of the following (in millions):



	March 31,			September 30,
	2016			2015
Raw materials	$	576.5		$	532.1
Partially finished products	360.1			266.3
Finished products	539.4			594.4
Inventories at FIFO cost	1,476.0			1,392.8
Less: Progress/performance-based payments on U.S. government contracts	(23.2		)	(12.9		)
Excess of FIFO cost over LIFO cost	(79.4		)	(78.2		)
	$	1,373.4		$	1,301.7

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

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

5. Investments in Unconsolidated Affiliates

Investments in unconsolidated affiliates are accounted for under the equity method and consisted of the following (in millions):



	March 31,		September 30,
	2016		2015
Mezcladoras (Mexico)	$	11.6	$	10.6
RiRent (The Netherlands)	5.2		5.8
Other investments in unconsolidated affiliates	—		(0.2		)
	$	16.8	$	16.2

Recorded investments generally represent the Company’s maximum exposure to loss as a result of the Company’s ownership interest. Earnings or losses are reflected in “Equity in earnings of unconsolidated affiliates” in the Condensed Consolidated Statements of Income.

The Company and an unaffiliated third party are joint venture partners in Mezcladoras Y Trailers de Mexico, S.A. de C.V. (“Mezcladoras”). Mezcladoras is a manufacturer and distributor of industrial and commercial machinery with primary operations in Mexico. The Company recognized sales to Mezcladoras of $2.0 million and $6.3 million during the six months ended March 31, 2016 and 2015 , respectively. The Company recognizes income on sales to Mezcladoras at the time of shipment in proportion to the outside third-party interest in Mezcladoras and recognizes the remaining income upon the joint venture's sale of inventory to an unaffiliated customer. The Company earns a service fee for certain operational support services provided to Mezcladoras. The Company recognized service fees of $0.6 million for each of the six months ended March 31, 2016 and 2015 .

The Company and an unaffiliated third party are joint venture partners in RiRent Europe BV (“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 requirements on short notice. RiRent does not provide services directly to end users. The Company and its joint venture partner are in the process of winding down RiRent. To the extent that RiRent has existing outstanding contracts, those contracts will continue to be maintained. The Company received dividends of €0.9 million ( $1.0 million ) and €2.3 million ( $2.8 million ) from RiRent during the six months ended March 31, 2016 and 2015, respectively.

6. Property, Plant and Equipment

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



	March 31,			September 30,
	2016			2015
Land and land improvements	$	57.6		$	57.5
Buildings	279.1			274.8
Machinery and equipment	713.0			681.1
Equipment on operating lease to others	41.6			42.2
Construction in progress	30.5			38.1
	1,121.8			1,093.7
Less accumulated depreciation	(643.5		)	(617.9		)
	$	478.3		$	475.8

Depreciation expense was $18.7 million and $16.2 million for the three months ended March 31, 2016 and 2015 , respectively. Depreciation expense was $35.8 million and $32.3 million for the six months ended March 31, 2016 and 2015 , respectively. Capitalized interest was insignificant for all reported periods.

Equipment on operating lease to others represents the cost of equipment shipped to customers for whom the Company has guaranteed the residual value and equipment on short-term leases. These transactions are accounted for as operating leases with

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

the related assets capitalized and depreciated over their estimated economic lives of five to ten years. Cost less accumulated depreciation for equipment on operating lease at March 31, 2016 and September 30, 2015 was $33.8 million and $33.9 million , respectively.

7. Goodwill and Purchased Intangible Assets

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

The following table presents changes in goodwill during the six months ended March 31, 2016 (in millions):



	Access Equipment		Fire & Emergency		Commercial		Total
Net goodwill at September 30, 2015	$	874.2	$	106.1	$	20.8	$	1,001.1
Foreign currency translation	4.8		—		0.1		4.9
Net goodwill at March 31, 2016	$	879.0	$	106.1	$	20.9	$	1,006.0

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



	March 31, 2016							September 30, 2015
	Gross		Accumulated Impairment			Net		Gross		Accumulated Impairment			Net
Access equipment	$	1,811.1	$	(932.1	)	$	879.0	$	1,806.3	$	(932.1	)	$	874.2
Fire & emergency	108.1		(2.0		)	106.1		108.1		(2.0		)	106.1
Commercial	196.8		(175.9		)	20.9		196.7		(175.9		)	20.8
	$	2,116.0	$	(1,110.0	)	$	1,006.0	$	2,111.1	$	(1,110.0	)	$	1,001.1

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



	March 31, 2016
	Weighted- Average Life (in years)	Gross		Accumulated Amortization			Net
Amortizable intangible assets:
Distribution network	39.1	$	55.4	$	(27.3	)	$	28.1
Non-compete	10.5	56.4		(56.4		)	—
Technology-related	11.9	104.8		(87.5		)	17.3
Customer relationships	12.8	552.0		(407.0		)	145.0
Other	16.4	16.5		(14.5		)	2.0
	14.5	785.1		(592.7		)	192.4
Non-amortizable trade names		387.8		—			387.8
		$	1,172.9	$	(592.7	)	$	580.2

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



	September 30, 2015
	Weighted- Average Life (in years)	Gross		Accumulated Amortization			Net
Amortizable intangible assets:
Distribution network	39.1	$	55.4	$	(26.6	)	$	28.8
Non-compete	10.5	56.4		(56.3		)	0.1
Technology-related	11.9	104.8		(83.3		)	21.5
Customer relationships	12.8	550.3		(384.0		)	166.3
Other	16.5	16.5		(14.3		)	2.2
	14.5	783.4		(564.5		)	218.9
Non-amortizable trade names		387.8		—			387.8
		$	1,171.2	$	(564.5	)	$	606.7

The estimated future amortization expense of purchased intangible assets for the remainder of fiscal 2016 and the five years succeeding September 30, 2016 are as follows: 2016 (remaining six months) - $26.2 million ; 2017 - $45.8 million ; 2018 - $38.3 million ; 2019 - $36.9 million ; 2020 - $11.0 million and 2021 - $5.3 million .

8. Credit Agreements

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



	March 31,			September 30,
	2016			2015
Senior Secured Term Loan	$	365.0		$	375.0
5.375% Senior Notes due March 2022	250.0			250.0
5.375% Senior Notes due March 2025	250.0			250.0
	865.0			875.0
Less current maturities	(20.0		)	(20.0		)
	$	845.0		$	855.0

Revolving Credit Facility	$	132.2		$	63.5
Other short-term borrowings	3.5			—
Current maturities of long-term debt	20.0			20.0
	$	155.7		$	83.5

In March 2014, the Company entered into an Amended and Restated Credit Agreement with various lenders (the “Credit Agreement”). The Credit Agreement provides for (i) a revolving credit facility (“Revolving Credit Facility”) that matures in March 2019 with an initial maximum aggregate amount of availability of $600 million and (ii) a $400 million term loan (“Term Loan”) due in quarterly principal installments of $5.0 million with a balloon payment of $310.0 million due at maturity in March 2019. In January 2015, the Company entered into an agreement with lenders under the Credit Agreement that increased the Revolving Credit Facility to an aggregate maximum amount of $850 million . At March 31, 2016 , borrowings under the Revolving Credit Facility of $132.2 million and outstanding letters of credit of $113.0 million reduced available capacity under the Revolving Credit Facility to $604.8 million .

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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

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

Borrowings under the Credit Agreement bear interest 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 March 31, 2016 , the interest spread on the Revolving Credit Facility and Term Loan was 150 basis points. The weighted-average interest rate on borrowings outstanding under both the Revolving Credit Facility and Term Loan at March 31, 2016 was 1.94% .

The Credit Agreement contains various restrictions and covenants, including requirements that the Company maintain certain financial ratios at prescribed levels and restrictions, subject to certain exceptions, 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 1.00 .


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


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

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

The Company was in compliance with the financial covenants contained in the Credit Agreement as of March 31, 2016 .

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


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


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

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In February 2014, the Company issued $250.0 million of 5.375% unsecured senior notes due March 1, 2022 (the “2022 Senior Notes”). In March 2015, the Company issued $250.0 million of 5.375% unsecured senior notes due March 1, 2025 (the “2025 Senior Notes”). The proceeds of both notes were used to repay existing outstanding notes of the Company. The Company has the option to redeem the 2022 Senior Notes and the 2025 Senior Notes for a premium after March 1, 2017 and March 1, 2020, respectively.

The 2022 Senior Notes and the 2025 Senior Notes were issued pursuant to separate indentures (the “Indentures”) among the Company, the subsidiary guarantors named therein and a trustee. The Indentures contain customary affirmative and negative covenants. Certain of the Company’s subsidiaries jointly, severally, fully and unconditionally guarantee the Company’s obligations under the 2022 Senior Notes and 2025 Senior Notes. See Note 21 of the Notes to Condensed Consolidated Financial Statements for separate financial information of the subsidiary guarantors.

In October 2015, the Company entered into a 63.0 million Chinese renminbi uncommitted line of credit to provide short-term finance support to operations in China. There was 22.8 million Chinese renminbi ( $3.5 million ) outstanding on the uncommitted line of credit at March 31, 2016. The uncommitted line of credit carries a variable interest rate that is set by the lender, which was 4.35% at March 31, 2016 .

The fair value of the long-term debt is estimated based upon Level 2 inputs to reflect market rate of the Company’s debt. At March 31, 2016 , the fair value of the 2022 Senior Notes and the 2025 Senior Notes was estimated to be $254 million and $250 million , respectively, and the fair value of the Term Loan approximated book value. At September 30, 2015, the fair value of the 2022 Senior Notes and the 2025 Senior Notes was estimated to be $252 million and $249 million , respectively, and the fair value of the Term Loan approximated book value. See Note 13 of the Notes to Condensed Consolidated Financial Statements for the definition of a Level 2 input.

9. Warranties

The Company’s products generally carry explicit warranties that extend from six months to five years, based on terms that are generally accepted in the marketplace. Selected components (such as engines, transmissions, tires, etc.) included in the Company’s end products may include manufacturers’ warranties. These manufacturers’ warranties are generally passed on to the end customer of the Company’s products, and the customer would generally deal directly with the component manufacturer. Accrued warranty is reported in "Other current liabilities" in the Condensed Consolidated Balance Sheets.

The Company offers a range of extended warranty options across its product lines. The premiums received for an extended warranty are generally deferred until after the expiration of the standard warranty period. The unearned premium is then recognized in income over the term of the extended warranty period in proportion to the costs that are expected to be incurred. Unamortized extended warranty premiums included in the following table totaled $29.5 million and $25.3 million at March 31, 2016 and 2015, respectively, and are included in the Condensed Consolidated Balance Sheets as “Other current liabilities” or “Other long-term liabilities”.

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



	Six Months Ended March 31,
	2016			2015
Balance at beginning of period	$	92.1		$	101.9
Warranty provisions	19.8			19.8
Settlements made	(27.1		)	(25.2		)
Changes in liability for pre-existing warranties, net	1.4			(3.5		)
Premiums received	7.4			5.8
Amortization of premiums received	(5.4		)	(4.5		)
Foreign currency translation	0.2			(2.5		)
Balance at end of period	$	88.4		$	91.8

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Provisions for estimated warranty and other related costs are recorded at the time of sale and are periodically adjusted to reflect actual experience. Certain warranty and other related claims involve matters of dispute that ultimately are resolved by negotiation, arbitration or litigation. At times, warranty issues arise that are beyond the scope of the Company's historical experience. It is reasonably possible that additional warranty and other related claims could arise from disputes or other matters in excess of amounts accrued; however, the Company does not expect that any such amounts, while not determinable, would have a material effect on the Company's consolidated financial condition, result of operations or cash flows.

10. Guarantee Arrangements

The Company is party to multiple agreements whereby at March 31, 2016 it guaranteed an aggregate of $574.7 million in indebtedness of customers. The Company estimated that its maximum loss exposure under these contracts at March 31, 2016 was $121.3 million . Under the terms of these and various related agreements and upon the occurrence of certain events, the Company generally has the ability to, among other things, take possession of the underlying collateral. If the financial condition of the customers were to deteriorate and result in their inability to make payments, then loss provisions in excess of amounts provided for at inception may be required. While the Company does not expect to experience losses under these agreements that are materially in excess of the amounts reserved, it cannot provide any assurance that the financial condition of the third parties will not deteriorate resulting in the third parties ’ inability to meet their obligations. In the event that this occurs, the Company cannot guarantee that the collateral underlying the agreements will be sufficient to avoid losses materially in excess of the amounts reserved. Any losses under these guarantees would generally be mitigated by the value of any underlying collateral, including financed equipment, and are generally subject to the finance company's ability to provide the Company clear title to foreclosed equipment and other conditions. During periods of economic weakness, collateral values generally decline and can contribute to higher exposure to losses.

Changes in the Company’s credit guarantee liability were as follows (in millions):



	Three Months Ended March 31,						Six Months Ended March 31,
	2016			2015			2016			2015
Balance at beginning of period	$	5.8		$	4.8		$	5.6		$	4.6
Provision for new credit guarantees	1.5			0.9			2.3			1.5
Changes for pre-existing guarantees, net	0.3			(0.5		)	0.6			(0.4		)
Amortization of previous guarantees	(0.6		)	(0.9		)	(1.5		)	(1.3		)
Foreign currency translation	—			—			—			(0.1		)
Balance at end of period	$	7.0		$	4.3		$	7.0		$	4.3

11. Shareholders' Equity

On August 31, 2015, the Company's Board of Directors increased the Company's Common Stock repurchase authorization by 10,000,000 shares, increasing the repurchase authorization to 10,299,198 shares from the balance remaining from prior authorizations. Between August 31, 2015 and March 31, 2016, the Company repurchased 2,786,624 shares under this authorization at a cost of $112.0 million . As a result, the Company had 7,512,574 shares of Common Stock remaining under this repurchase authorization as of March 31, 2016 . The Company is restricted by its Credit Agreement from repurchasing shares in certain situations. See Note 8 of the Notes to Condensed Consolidated Financial Statements for information regarding these restrictions.

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

12. Derivative Financial Instruments and Hedging Activities

The Company has used forward foreign currency exchange contracts (“derivatives”) to reduce the exchange rate risk of specific foreign currency denominated transactions. These derivatives typically require the exchange of a foreign currency for U.S. dollars at a fixed rate at a future date. At times, the Company has designated these hedges as either cash flow hedges or fair value hedges under FASB Accounting Standards Codification (“ASC”) Topic 815, Derivatives and Hedging. At March 31, 2016 , the total notional U.S. dollar equivalent of outstanding forward foreign exchange contracts designated as hedges in accordance with ASC Topic 815 was $5.9 million . Net gains or losses related to hedge ineffectiveness were insignificant for the six month periods ended March 31, 2016 and 2015. Ineffectiveness is included in “Miscellaneous, net” in the Condensed Consolidated Statements of Income along with mark-to-market adjustments on outstanding non-designated derivatives. The maximum length of time the Company is hedging its exposure to the variability in future cash flows is twelve months.

The Company has entered into forward foreign currency exchange contracts to create an economic hedge to manage foreign exchange risk exposure associated with non-functional currency denominated payables resulting from global sourcing activities. The Company has not designated these derivative contracts as hedge transactions under FASB ASC Topic 815, and accordingly, the mark-to-market impact of these derivatives is recorded each period in current earnings. At March 31, 2016 , the U.S. dollar equivalent of these outstanding forward foreign exchange contracts totaled $92.2 million in notional amounts, including $61.0 million in contracts to sell Australian dollars, $10.3 million in contracts to sell euro, $8.0 million in contracts to buy U.K. pound sterling, $6.5 million in contracts to buy euro and sell Canadian dollars and $5.0 million in contracts to buy Swedish krona and sell euro, with the remaining contracts covering a variety of foreign currencies.

The Company has entered into interest rate contracts to create economic hedges to manage changes in interest rates on executory sales contracts that exposes the Company to interest rate risk based on changes in market interest rates. The Company has not designated these interest rate contracts as hedge transactions under FASB ASC Topic 815, and accordingly, the mark-to-market impact of these derivatives is recorded each period in current earnings. At March 31, 2016 , the U.S. dollar equivalent notional amount of these outstanding interest rate contracts totaled $19.9 million .

Fair Market Value of Financial Instruments — The fair values of all open derivative instruments were as follows (in millions):



	March 31, 2016				September 30, 2015
	Other Current Assets		Other Current Liabilities		Other Current Assets		Other Current Liabilities
Cash flow hedges:
Foreign exchange contracts	$	0.2	$	0.1	$	0.4	$	—

Not designated as hedging instruments:
Foreign exchange contracts	0.2		2.4		0.3		0.4
Interest rate contracts	—		0.7		—		0.7
	$	0.4	$	3.2	$	0.7	$	1.1

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The pre-tax effects of derivative instruments consisted of the following (in millions):



	Classification of Gains (Losses)	Three Months Ended March 31,					Six Months Ended March 31,
	Classification of Gains (Losses)	2016			2015		2016			2015
Cash flow hedges:
Foreign exchange contracts	Miscellaneous, net	$	(0.1	)	$	—	$	(0.1	)	$	—

Not designated as hedging instruments:
Foreign exchange contracts	Miscellaneous, net	(4.5		)	5.4		(5.8		)	8.8
Interest rate contracts	Miscellaneous, net	(0.1		)	—		(0.2		)	—
		$	(4.7	)	$	5.4	$	(6.1	)	$	8.8

13. Fair Value Measurement

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

The three levels are defined as follows:


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


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


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

There were no transfers of assets between levels during the three and six months ended March 31, 2016 .

As of March 31, 2016 and September 30, 2015 the fair values of the Company’s financial assets and liabilities were as follows (in millions):



	Level 1		Level 2		Level 3		Total
March 31, 2016
Assets:
SERP plan assets ^(a)	$	22.3	$	—	$	—	$	22.3
Foreign currency exchange derivatives ^(b)	—		0.4		—		0.4

Liabilities:
Foreign currency exchange derivatives ^(b)	$	—	$	2.5	$	—	$	2.5
Interest rate contracts ^(c)	—		0.7		—		0.7

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



	Level 1		Level 2		Level 3		Total
September 30, 2015
Assets:
SERP plan assets ^(a)	$	21.6	$	—	$	—	$	21.6
Foreign currency exchange derivatives ^(b)	—		0.7		—		0.7

Liabilities:
Foreign currency exchange derivatives ^(b)	$	—	$	0.4	$	—	$	0.4
Interest rate contracts ^(c)	—		0.7		—		0.7

_________________________

^(a)

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


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


^(c)	Based on observable market transactions of interest rate swap prices.

14. Stock-Based Compensation

In February 2009, the Company’s shareholders approved the 2009 Incentive Stock and Awards Plan (as amended, the “2009 Stock Plan”). The 2009 Stock Plan replaced the 2004 Incentive Stock and Awards Plan (as amended, the “2004 Stock Plan”). While no new awards will be granted under the 2004 Stock Plan, awards previously made under the 2004 Stock Plan that were outstanding as of the initial approval date of the 2009 Stock Plan will remain outstanding and continue to be governed by the provisions of the 2004 Stock Plan. On January 31, 2012, the Company's shareholders approved an amendment and restatement of the 2009 Stock Plan. At March 31, 2016 , the Company had reserved 6,373,467 shares of Common Stock available for issuance under the 2009 Stock Plan to provide for the exercise of outstanding stock options and the issuance of Common Stock under incentive compensation awards, including awards issued prior to the effective date of the 2009 Stock Plan.

The Company recognizes stock-based compensation expense over the requisite service period for vesting of an award, or to an employee's eligible retirement date, if earlier and applicable. Total stock-based compensation expense, including cash-based liability awards, for the three and six months ended March 31, 2016 was $6.5 million ( $4.1 million net of tax) and $12.5 million ( $7.9 million net of tax), respectively. Total stock-based compensation expense, including cash-based liability awards, for the three and six months ended March 31, 2015 was $6.8 million ( $4.3 million net of tax) and $13.3 million ( $8.4 million net of tax), respectively.

15. Employee Benefit Plans

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



	Three Months Ended March 31,						Six Months Ended March 31,
	2016			2015			2016			2015
Components of net periodic benefit cost
Service cost	$	2.8		$	3.0		$	5.7		$	6.0
Interest cost	4.5			4.5			9.1			9.0
Expected return on plan assets	(4.5		)	(4.5		)	(9.0		)	(9.1		)
Amortization of prior service cost	0.5			0.4			0.9			0.8
Amortization of net actuarial loss	0.6			0.6			1.2			1.3
	$	3.9		$	4.0		$	7.9		$	8.0

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

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



	Three Months Ended March 31,						Six Months Ended March 31,
	2016			2015			2016			2015
Components of net periodic benefit cost (income)
Service cost	$	0.4		$	0.5		$	0.7		$	0.9
Interest cost	0.4			0.4			0.8			0.8
Amortization of prior service cost	(0.3		)	(0.3		)	(0.5		)	(0.5		)
Curtailment	—			—			—			(3.4		)
Amortization of net actuarial loss (gain)	(0.1		)	0.1			(0.1		)	0.1
	$	0.4		$	0.7		$	0.9		$	(2.1	)

The Company made contributions to fund benefit payments under its other post-employment benefit plans of $1.0 million for each of the six months ended March 31, 2016 and 2015 . The Company estimates that it will make additional contributions of approximately $1.0 million under these other post-employment benefit plans prior to the end of fiscal 2016 .

The Company's pension plan investment strategy is based on an expectation that, over time, equity securities will provide higher returns than debt securities. The plans primarily minimize the risk of larger losses under this strategy through diversification of investments by asset class, by investing in different styles of investment management within the classes and by using a number of different investment managers. Beginning in fiscal 2016, the Company began to implement a liability driven investment strategy for those pension plans with frozen benefits. The objective of this strategy is to more closely align the pension plan assets with the pension plan liabilities in terms of how both respond to changes in interest rates. Plan assets will be allocated to two investment categories, including a category containing high quality fixed income securities and another category comprised of traditional securities and alternative asset classes. Assets are managed externally according to guidelines approved by the Company. Over time, the Company intends to reduce assets allocated to the return seeking category and correspondingly increase assets allocated to the high quality fixed income category to align more closely with the pension plan obligations.

16. Income Taxes

The Company recorded income tax expense of $20.3 million for the three months ended March 31, 2016 , or 27.0% of pre-tax income, compared to $29.5 million , or 35.7% of pre-tax income for the three months ended March 31, 2015 . Results for the three months ended March 31, 2016 were favorably impacted by $4.4 million of discrete tax benefits, including $3.5 million related to provision to return adjustments and $0.8 million related to reduction in reserves for uncertain tax benefits resulting from statutes of limitations lapses. Results for the three months ended March 31, 2015 were favorably impacted by $0.4 million of net discrete tax benefits related to reduction in reserves for uncertain tax benefits resulting from statutes of limitations lapses.

The Company recorded income tax expense of $22.0 million for the six months ended March 31, 2016 , or 24.1% of pre-tax income, compared to $45.7 million , or 34.2% of pre-tax income for the six months ended March 31, 2015 . Tax expense included net discrete tax benefits of $8.0 million and $1.1 million for the six months ended March 31, 2016 and 2015, respectively. Discrete tax benefits recorded in the six months ended March 31, 2016 included a $2.4 million benefit related to the reinstatement of the U.S. research and development tax credit in December 2015, a $3.5 million benefit related to provision to return adjustments, and a $2.0 million benefit related to reduction in reserves for uncertain tax benefits relating to interest adjustments and statutes of limitations lapses. Discrete tax benefits recorded in the six months ended March 31, 2015 included a $2.2 million benefit related to the reinstatement of the U.S. research and development tax credit in December 2014, a $0.4 million benefit related to reduction in reserves for uncertain tax benefits resulting from statutes of limitations lapses, and a $1.4 million charge related to provision to return adjustments.

The Company’s liability for gross unrecognized tax benefits, excluding related interest and penalties, was $27.3 million and $27.0 million as of March 31, 2016 and September 30, 2015 , respectively. As of March 31, 2016 , net unrecognized tax benefits, excluding interest and penalties, of $18.0 million would affect the Company’s net income if recognized.

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits in the “Provision for income taxes” in the Condensed Consolidated Statements of Income. During the six months ended March 31, 2016 and 2015 , the Company recognized benefits of $1.4 million and charges of $1.5 million , respectively, related to interest and penalties. At March 31, 2016 , the Company had accruals for the payment of interest and penalties of $9.6 million . During the next twelve months, it is reasonably possible that federal, state and foreign tax audit resolutions could reduce net unrecognized tax benefits by approximately $1.9 million because the Company’s tax positions are sustained on audit, the Company agrees to their disallowance or the statutes of limitations close.

The Company files federal income tax returns as well as multiple state, local and non-U.S. jurisdiction tax returns. The Company is regularly audited by federal, state and foreign tax authorities.

17. Accumulated Other Comprehensive Income (Loss)

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



	Three Months Ended March 31, 2016
	Employee Pension and Postretirement Benefits, Net of Tax			Cumulative Translation Adjustments			Gains (Losses) on Derivatives, Net of Tax			Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period	$	(45.9	)	$	(109.3	)	$	0.3		$	(154.9	)
Other comprehensive income (loss) before reclassifications	—			18.9			(0.2		)	18.7
Amounts reclassified from accumulated other comprehensive income (loss)	0.4			—			—			0.4
Net current period other comprehensive income (loss)	0.4			18.9			(0.2		)	19.1
Balance at end of period	$	(45.5	)	$	(90.4	)	$	0.1		$	(135.8	)



	Three Months Ended March 31, 2015
	Employee Pension and Postretirement Benefits, Net of Tax			Cumulative Translation Adjustments			Gains (Losses) on Derivatives, Net of Tax		Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period	$	(44.4	)	$	(47.9	)	$	—	$	(92.3	)
Other comprehensive income (loss) before reclassifications	—			(53.1		)	—		(53.1		)
Amounts reclassified from accumulated other comprehensive income (loss)	0.5			—			—		0.5
Net current period other comprehensive income (loss)	0.5			(53.1		)	—		(52.6		)
Balance at end of period	$	(43.9	)	$	(101.0	)	$	—	$	(144.9	)



	Six Months Ended March 31, 2016
	Employee Pension and Postretirement Benefits, Net of Tax			Cumulative Translation Adjustments			Gains (Losses) on Derivatives, Net of Tax		Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period	$	(46.4	)	$	(98.1	)	$	0.1	$	(144.4	)
Other comprehensive income (loss) before reclassifications	—			7.7			—		7.7
Amounts reclassified from accumulated other comprehensive income (loss)	0.9			—			—		0.9
Net current period other comprehensive income (loss)	0.9			7.7			—		8.6
Balance at end of period	$	(45.5	)	$	(90.4	)	$	0.1	$	(135.8	)

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



	Six Months Ended March 31, 2015
	Employee Pension and Postretirement Benefits, Net of Tax			Cumulative Translation Adjustments			Gains (Losses) on Derivatives, Net of Tax		Accumulated Other Comprehensive Income (Loss)
Balance at beginning of period	$	(44.2	)	$	(25.0	)	$	—	$	(69.2	)
Other comprehensive income (loss) before reclassifications	—			(76.0		)	—		(76.0		)
Amounts reclassified from accumulated other comprehensive income (loss)	0.3			—			—		0.3
Net current period other comprehensive income (loss)	0.3			(76.0		)	—		(75.7		)
Balance at end of period	$	(43.9	)	$	(101.0	)	$	—	$	(144.9	)

Reclassifications out of accumulated other comprehensive income (loss) included in the computation of net periodic pension and postretirement benefit cost (refer to Note 15 of the Notes to Condensed Consolidated Financial Statements for additional details regarding employee benefit plans) were as follows (in millions):



	Three Months Ended March 31,						Six Months Ended March 31,
	2016			2015			2016			2015
Amortization of employee pension and postretirement benefits items
Prior service costs	$	(0.2	)	$	(0.1	)	$	(0.4	)	$	(0.3	)
Actuarial losses	(0.5		)	(0.7		)	(1.1		)	(1.4		)
Curtailment	—			—			—			1.2
	(0.7		)	(0.8		)	(1.5		)	(0.5		)
Tax benefit	0.3			0.3			0.6			0.2
	$	(0.4	)	$	(0.5	)	$	(0.9	)	$	(0.3	)

18. Earnings Per Share

Prior to September 1, 2013, the Company granted awards of nonvested stock that contained a nonforfeitable right to dividends, if declared. In accordance with FASB ASC Topic 260, Earnings Per Share , these awards are considered to be participating securities, and as a result, earnings per share is calculated using the two-class method. The two-class method is an earnings allocation method that determines earnings per share for common shares and participating securities. The undistributed earnings are allocated between common shares and participating securities as if all earnings had been distributed during the period. Participating securities and common shares have equal rights to undistributed earnings.

Effective September 1, 2013, new grants of awards of nonvested stock do not contain a nonforfeitable right to dividends during the vesting period. As a result, an employee will forfeit the right to dividends accrued on unvested awards if such awards do not ultimately vest. As such, these awards are not treated as participating securities in the earnings per share calculation as the employees do not have equivalent dividend rights as common shareholders.

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The calculation of basic and diluted earnings per common share was as follows (in millions, except number of share amounts):



	Three Months Ended March 31,					Six Months Ended March 31,
	2016		2015			2016		2015
Net income	$	56.1	$	54.6		$	70.7	$	89.3
Earnings allocated to participating securities	—		(0.1		)	—		(0.2		)
Earnings available to common shareholders	$	56.1	$	54.5		$	70.7	$	89.1

Basic Earnings Per Share:
Weighted-average common shares outstanding	73,118,295		78,007,479			73,593,439		78,433,035

Diluted Earnings Per Share:
Basic weighted-average common shares outstanding	73,118,295		78,007,479			73,593,439		78,433,035
Dilutive stock options and other equity-based compensation awards	743,045		1,102,424			766,421		1,103,796
Participating restricted stock	—		(115,163		)	—		(112,237		)
Diluted weighted-average common shares outstanding	73,861,340		78,994,740			74,359,860		79,424,594

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



	Three Months Ended March 31,		Six Months Ended March 31,
	2016	2015	2016	2015
Stock options	1,656,741	1,144,416	1,676,943	1,156,103

19. Contingencies, Significant Estimates and Concentrations

Personal Injury Actions and Other - Product and general liability claims are made against the Company from time to time in the ordinary course of business. The Company is generally self-insured for future claims up to $5.0 million per claim. Accordingly, a reserve is maintained for the estimated costs of such claims. At March 31, 2016 and September 30, 2015 , the estimated net liabilities for product and general liability claims totaled $38.3 million and $40.4 million , respectively. There is inherent uncertainty as to the eventual resolution of unsettled claims. Management, however, believes that any losses in excess of established reserves will not have a material effect on the Company’s financial condition, results of operations or cash flows.

Market Risks - The Company was contingently liable under bid, performance and specialty bonds totaling $556.6 million and $469.9 million at March 31, 2016 and September 30, 2015 , respectively. Open standby letters of credit issued by the Company’s banks in favor of third parties totaled $113.0 million and $62.6 million at March 31, 2016 and September 30, 2015 , respectively.

Other Matters - The Company is subject to environmental matters and legal proceedings and claims, including patent, antitrust, product liability, warranty and state dealership regulation compliance proceedings, that arise in the ordinary course of business. Although the final results of all such matters and claims cannot be predicted with certainty, management believes that the ultimate resolution of all such matters and claims will not have a material effect on the Company’s financial condition, results of operations or cash flows. Actual results could vary, among other things, due to the uncertainties involved in litigation.

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

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

20. Business Segment Information

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

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

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



	Three Months Ended March 31,
	2016								2015
	External Customers		Inter- segment			Net Sales			External Customers		Inter- segment			Net Sales
Access equipment
Aerial work platforms	$	375.1	$	—		$	375.1		$	432.5	$	—		$	432.5
Telehandlers	214.7		—			214.7			379.7		—			379.7
Other	164.5		—			164.5			169.6		—			169.6
Total access equipment	754.3		—			754.3			981.8		—			981.8

Defense	296.8		0.2			297.0			157.6		1.1			158.7

Fire & emergency	237.2		3.2			240.4			194.6		8.3			202.9

Commercial
Concrete placement	111.3		—			111.3			111.0		—			111.0
Refuse collection	99.5		—			99.5			76.7		—			76.7
Other	25.2		0.7			25.9			32.5		0.7			33.2
Total commercial	236.0		0.7			236.7			220.2		0.7			220.9
Intersegment eliminations	—		(4.1		)	(4.1		)	—		(10.1		)	(10.1		)
	$	1,524.3	$	—		$	1,524.3		$	1,554.2	$	—		$	1,554.2

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



	Six Months Ended March 31,
	2016								2015
	External Customers		Inter- segment			Net Sales			External Customers		Inter- segment			Net Sales
Access equipment
Aerial work platforms	$	617.1	$	—		$	617.1		$	709.8	$	—		$	709.8
Telehandlers	326.5		—			326.5			670.1		—			670.1
Other	340.5		—			340.5			318.6		—			318.6
Total access equipment	1,284.1		—			1,284.1			1,698.5		—			1,698.5

Defense	613.7		1.3			615.0			426.8		1.2			428.0

Fire & emergency	442.6		5.3			447.9			354.1		15.8			369.9

Commercial
Concrete placement	183.6		—			183.6			197.1		—			197.1
Refuse collection	198.5		—			198.5			166.3		—			166.3
Other	53.8		1.1			54.9			64.7		3.0			67.7
Total commercial	435.9		1.1			437.0			428.1		3.0			431.1
Intersegment eliminations	—		(7.7		)	(7.7		)	—		(20.0		)	(20.0		)
	$	2,776.3	$	—		$	2,776.3		$	2,907.5	$	—		$	2,907.5



	Three Months Ended March 31,						Six Months Ended March 31,
	2016			2015			2016			2015
Operating income (loss):
Access equipment	$	75.7		$	136.9		$	96.1		$	214.1
Defense	27.8			(12.0		)	51.0			(2.2		)
Fire & emergency	14.9			9.0			25.0			10.5
Commercial	17.2			8.6			26.1			21.0
Corporate	(44.2		)	(32.8		)	(76.5		)	(68.1		)
Intersegment eliminations	—			—			—			0.1
	91.4			109.7			121.7			175.4
Interest expense, net of interest income	(15.1		)	(28.2		)	(29.2		)	(41.8		)
Miscellaneous other income (expense)	(1.0		)	1.3			(1.0		)	—
Income before income taxes and equity in earnings of unconsolidated affiliates	$	75.3		$	82.8		$	91.5		$	133.6

Table of Contents

OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)



	March 31,		September 30,
	2016		2015
Identifiable assets:
Access equipment:
U.S.	$	2,168.1	$	2,178.7
Europe ^(a)	546.1		531.4
Rest of the World	214.4		201.5
Total access equipment	2,928.6		2,911.6
Defense:
U.S.	571.5		424.5
Rest of the World	1.8		5.1
Total defense	573.3		429.6
Fire & emergency - U.S.	532.1		530.7
Commercial:
U.S.	404.8		395.1
Rest of the World ^(a)	40.9		41.1
Total commercial	445.7		436.2
Corporate:
U.S. ^(b)	206.7		218.6
Rest of the World ^(c)	64.8		86.3
Total corporate	271.5		304.9
	$	4,751.2	$	4,613.0

_________________________


^(a)	Includes investments in unconsolidated affiliates.


^(b)	Primarily includes cash, short-term investments and capitalized costs related to a shared enterprise resource planning system.


^(c)	Includes cash and a corporate-led manufacturing facility that supports multiple operating segments.

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



	Six Months Ended March 31,
	2016		2015
Net sales:
United States	$	2,070.4	$	2,321.0
Other North America	116.3		143.5
Europe, Africa and Middle East	388.1		229.6
Rest of the World	201.5		213.4
	$	2,776.3	$	2,907.5

Table of Contents

OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

21. Separate Financial Information of Subsidiary Guarantors of Indebtedness

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

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

Condensed Consolidating Statement of Income and Comprehensive Income

For the Three Months Ended March 31, 2016



	Oshkosh Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	—		$	1,284.0		$	269.4		$	(29.1	)	$	1,524.3
Cost of sales	0.4			1,071.0			222.8			(29.2		)	1,265.0
Gross income	(0.4		)	213.0			46.6			0.1			259.3
Selling, general and administrative expenses	35.0			96.9			22.8			—			154.7
Amortization of purchased intangibles	—			9.7			3.5			—			13.2
Operating income (loss)	(35.4		)	106.4			20.3			0.1			91.4
Interest expense	(70.4		)	(16.2		)	(0.4		)	71.4			(15.6		)
Interest income	0.4			23.1			48.4			(71.4		)	0.5
Miscellaneous, net	13.6			(50.5		)	35.9			—			(1.0		)
Income (loss) before income taxes	(91.8		)	62.8			104.2			0.1			75.3
Provision for (benefit from) income taxes	(34.1		)	18.8			35.6			—			20.3
Income (loss) before equity in earnings of affiliates	(57.7		)	44.0			68.6			0.1			55.0
Equity in earnings of consolidated subsidiaries	113.8			36.0			19.6			(169.4		)	—
Equity in earnings of unconsolidated affiliates	—			—			1.1			—			1.1
Net income	56.1			80.0			89.3			(169.3		)	56.1
Other comprehensive income (loss), net of tax	19.1			0.7			18.0			(18.7		)	19.1
Comprehensive income	$	75.2		$	80.7		$	107.3		$	(188.0	)	$	75.2

Table of Contents

OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Statement of Income and Comprehensive Income

For the Three Months Ended March 31, 2015



	Oshkosh Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	—		$	1,298.5		$	277.9		$	(22.2	)	$	1,554.2
Cost of sales	0.3			1,087.7			212.3			(21.9		)	1,278.4
Gross income	(0.3		)	210.8			65.6			(0.3		)	275.8
Selling, general and administrative expenses	28.1			99.3			25.4			—			152.8
Amortization of purchased intangibles	—			9.9			3.4			—			13.3
Operating income (loss)	(28.4		)	101.6			36.8			(0.3		)	109.7
Interest expense	(74.6		)	(13.1		)	(0.4		)	59.3			(28.8		)
Interest income	0.4			16.0			43.5			(59.3		)	0.6
Miscellaneous, net	10.0			(5.7		)	(3.0		)	—			1.3
Income (loss) before income taxes	(92.6		)	98.8			76.9			(0.3		)	82.8
Provision for (benefit from) income taxes	(29.0		)	32.0			26.6			(0.1		)	29.5
Income (loss) before equity in earnings of affiliates	(63.6		)	66.8			50.3			(0.2		)	53.3
Equity in earnings of consolidated subsidiaries	118.2			17.7			72.1			(208.0		)	—
Equity in earnings of unconsolidated affiliates	—			—			1.3			—			1.3
Net income	54.6			84.5			123.7			(208.2		)	54.6
Other comprehensive income (loss), net of tax	(52.6		)	(1.5		)	(42.1		)	43.6			(52.6		)
Comprehensive income	$	2.0		$	83.0		$	81.6		$	(164.6	)	$	2.0

Condensed Consolidating Statement of Income and Comprehensive Income

For the Six Months Ended March 31, 2016



	Oshkosh Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	—		$	2,340.8		$	489.8		$	(54.3	)	$	2,776.3
Cost of sales	0.7			1,970.0			417.9			(54.4		)	2,334.2
Gross income	(0.7		)	370.8			71.9			0.1			442.1
Selling, general and administrative expenses	58.6			186.2			49.2			—			294.0
Amortization of purchased intangibles	—			19.5			6.9			—			26.4
Operating income (loss)	(59.3		)	165.1			15.8			0.1			121.7
Interest expense	(130.0		)	(30.9		)	(1.1		)	131.8			(30.2		)
Interest income	0.9			39.3			92.6			(131.8		)	1.0
Miscellaneous, net	28.5			(91.9		)	62.4			—			(1.0		)
Income (loss) before income taxes	(159.9		)	81.6			169.7			0.1			91.5
Provision for (benefit from) income taxes	(39.9		)	20.4			41.5			—			22.0
Income (loss) before equity in earnings of affiliates	(120.0		)	61.2			128.2			0.1			69.5
Equity in earnings of consolidated subsidiaries	191.0			54.1			13.2			(258.3		)	—
Equity in earnings of unconsolidated affiliates	(0.3		)	—			1.5			—			1.2
Net income	70.7			115.3			142.9			(258.2		)	70.7
Other comprehensive income (loss), net of tax	8.6			(2.2		)	9.9			(7.7		)	8.6
Comprehensive income	$	79.3		$	113.1		$	152.8		$	(265.9	)	$	79.3

Table of Contents

OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Statement of Income and Comprehensive Income

For the Six Months Ended March 31, 2015



	Oshkosh Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net sales	$	—		$	2,456.9		$	492.7		$	(42.1	)	$	2,907.5
Cost of sales	0.3			2,054.5			389.3			(42.1		)	2,402.0
Gross income	(0.3		)	402.4			103.4			—			505.5
Selling, general and administrative expenses	59.9			191.4			52.0			—			303.3
Amortization of purchased intangibles	—			19.7			7.1			—			26.8
Operating income (loss)	(60.2		)	191.3			44.3			—			175.4
Interest expense	(132.4		)	(25.9		)	(0.9		)	116.0			(43.2		)
Interest income	0.9			31.3			85.2			(116.0		)	1.4
Miscellaneous, net	18.2			(69.0		)	50.8			—			—
Income (loss) before income taxes	(173.5		)	127.7			179.4			—			133.6
Provision for (benefit from) income taxes	(57.6		)	44.0			59.3			—			45.7
Income (loss) before equity in earnings of affiliates	(115.9		)	83.7			120.1			—			87.9
Equity in earnings of consolidated subsidiaries	205.2			53.5			84.6			(343.3		)	—
Equity in earnings of unconsolidated affiliates	—			—			1.4			—			1.4
Net income	89.3			137.2			206.1			(343.3		)	89.3
Other comprehensive income (loss), net of tax	(75.7		)	(4.2		)	(71.9		)	76.1			(75.7		)
Comprehensive income	$	13.6		$	133.0		$	134.2		$	(267.2	)	$	13.6

Condensed Consolidating Balance Sheet

As of March 31, 2016



	Oshkosh Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	5.8	$	4.8	$	27.8		$	—		$	38.4
Receivables, net	22.3		819.3		245.9			(41.5		)	1,046.0
Inventories, net	—		958.0		415.4			—			1,373.4
Other current assets	22.5		83.5		26.4			—			132.4
Total current assets	50.6		1,865.6		715.5			(41.5		)	2,590.2
Investment in and advances to consolidated subsidiaries	5,922.5		1,206.2		(183.1		)	(6,945.6		)	—
Intercompany receivables	47.9		1,051.8		4,442.1			(5,541.8		)	—
Intangible assets, net	—		966.6		619.6			—			1,586.2
Other long-term assets	120.8		219.3		234.7			—			574.8
Total assets	$	6,141.8	$	5,309.5	$	5,828.8		$	(12,528.9	)	$	4,751.2

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	12.4	$	485.2	$	141.4		$	(41.3	)	$	597.7
Customer advances	—		520.9		5.0			—			525.9
Other current liabilities	215.0		211.2		94.9			(0.2		)	520.9
Total current liabilities	227.4		1,217.3		241.3			(41.5		)	1,644.5
Long-term debt, less current maturities	845.0		—		—			—			845.0
Intercompany payables	3,134.4		2,359.5		47.9			(5,541.8		)	—
Other long-term liabilities	60.6		188.7		138.0			—			387.3
Shareholders' equity	1,874.4		1,544.0		5,401.6			(6,945.6		)	1,874.4
Total liabilities and shareholders' equity	$	6,141.8	$	5,309.5	$	5,828.8		$	(12,528.9	)	$	4,751.2

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Balance Sheet

As of September 30, 2015



	Oshkosh Corporation		Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	14.8	$	6.3	$	21.8		$	—		$	42.9
Receivables, net	29.4		692.9		290.1			(47.8		)	964.6
Inventories, net	—		926.2		375.5			—			1,301.7
Other current assets	11.5		81.7		26.9			—			120.1
Total current assets	55.7		1,707.1		714.3			(47.8		)	2,429.3
Investment in and advances to consolidated subsidiaries	5,744.0		1,128.0		(192.4		)	(6,679.6		)	—
Intercompany receivables	47.2		998.7		4,331.3			(5,377.2		)	—
Intangible assets, net	—		984.4		623.4			—			1,607.8
Other long-term assets	117.3		228.9		229.7			—			575.9
Total assets	$	5,964.2	$	5,047.1	$	5,706.3		$	(12,104.6	)	$	4,613.0

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	16.3	$	415.3	$	168.7		$	(47.5	)	$	552.8
Customer advances	—		438.3		1.9			—			440.2
Other current liabilities	165.0		202.4		98.0			(0.3		)	465.1
Total current liabilities	181.3		1,056.0		268.6			(47.8		)	1,458.1
Long-term debt, less current maturities	855.0		—		—			—			855.0
Intercompany payables	2,957.5		2,372.5		47.2			(5,377.2		)	—
Other long-term liabilities	59.3		191.3		138.2			—			388.8
Shareholders' equity	1,911.1		1,427.3		5,252.3			(6,679.6		)	1,911.1
Total liabilities and shareholders' equity	$	5,964.2	$	5,047.1	$	5,706.3		$	(12,104.6	)	$	4,613.0

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended March 31, 2016



	Oshkosh Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net cash provided (used) by operating activities	$	(125.8	)	$	99.3		$	121.0		$	—		$	94.5

Investing activities:
Additions to property, plant and equipment	(12.7		)	(12.3		)	(15.3		)	—			(40.3		)
Additions to equipment held for rental	—			—			(22.7		)	—			(22.7		)
Proceeds from sale of equipment held for rental	—			0.6			25.5			—			26.1
Intercompany investing	(0.7		)	(76.4		)	(108.4		)	185.5			—
Other investing activities	(1.0		)	—			—			—			(1.0		)
Net cash provided (used) by investing activities	(14.4		)	(88.1		)	(120.9		)	185.5			(37.9		)

Financing activities:
Net decrease in short-term debt	(21.3		)	—			—			—			(21.3		)
Proceeds from issuance of debt (original maturities greater than three months)	270.0			—			3.5			—			273.5
Repayment of debt (original maturities greater than three months)	(190.0		)	—			—			—			(190.0		)
Repurchases of Common Stock	(100.1		)	—			—			—			(100.1		)
Dividends paid	(28.0		)	—			—			—			(28.0		)
Proceeds from exercise of stock options	1.9			—			—			—			1.9
Excess tax benefit from stock-based compensation	0.9			—			—			—			0.9
Intercompany financing	197.8			(13.0		)	0.7			(185.5		)	—
Net cash provided (used) by financing activities	131.2			(13.0		)	4.2			(185.5		)	(63.1		)

Effect of exchange rate changes on cash	—			0.3			1.7			—			2.0
Increase (decrease) in cash and cash equivalents	(9.0		)	(1.5		)	6.0			—			(4.5		)
Cash and cash equivalents at beginning of period	14.8			6.3			21.8			—			42.9
Cash and cash equivalents at end of period	$	5.8		$	4.8		$	27.8		$	—		$	38.4

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OSHKOSH CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended March 31, 2015



	Oshkosh Corporation			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Total
Net cash provided (used) by operating activities	$	(85.1	)	$	(20.6	)	$	35.0		$	—		$	(70.7	)

Investing activities:
Additions to property, plant and equipment	(14.4		)	(11.9		)	(43.5		)	—			(69.8		)
Additions to equipment held for rental	—			—			(15.5		)	—			(15.5		)
Proceeds from sale of equipment held for rental	—			—			13.4			—			13.4
Intercompany investing	(19.0		)	13.0			(19.0		)	25.0			—
Other investing activities	(0.5		)	(0.7		)	(0.3		)	—			(1.5		)
Net cash provided (used) by investing activities	(33.9		)	0.4			(64.9		)	25.0			(73.4		)

Financing activities:
Net increase in short-term debt	13.7			—			—			—			13.7
Proceeds from issuance of debt (original maturities greater than three months)	315.0			—			—			—			315.0
Repayment of debt (original maturities greater than three months)	(325.0		)	—			—			—			(325.0		)
Repurchases of Common Stock	(88.1		)	—			—			—			(88.1		)
Dividends paid	(26.7		)	—			—			—			(26.7		)
Debt issuance cost	(15.4		)	—			—			—			(15.4		)
Proceeds from exercise of stock options	3.4			—			—			—			3.4
Excess tax benefit from stock-based compensation	4.1			—			—			—			4.1
Intercompany financing	(30.7		)	22.0			33.7			(25.0		)	—
Net cash provided (used) by financing activities	(149.7		)	22.0			33.7			(25.0		)	(119.0		)

Effect of exchange rate changes on cash	—			(0.8		)	3.5			—			2.7
Increase (decrease) in cash and cash equivalents	(268.7		)	1.0			7.3			—			(260.4		)
Cash and cash equivalents at beginning of period	281.8			4.7			27.3			—			313.8
Cash and cash equivalents at end of period	$	13.1		$	5.7		$	34.6		$	—		$	53.4

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

Cautionary Statement About Forward-Looking Statements

This Management's Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Quarterly Report on Form 10-Q contain statements that Oshkosh Corporation (the “Company”) believes to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q, including, without limitation, statements regarding the Company’s future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, including those under the caption “Executive Overview” are forward-looking statements. When used in this Quarterly Report on Form 10-Q, words such as “may,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “should,” “project” or “plan” or the negative thereof or variations thereon or similar terminology are generally intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, assumptions and other factors, some of which are beyond the Company’s control, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements.These factors include the cyclical nature of the Company’s access equipment, commercial and fire & emergency markets, which are particularly impacted by the strength of U.S. and European economies and construction seasons; the Company’s estimates of access equipment demand which, among other factors, is influenced by customer historical buying patterns and rental company fleet replacement strategies; the strength of the U.S. dollar and its impact on Company exports, translation of foreign sales and purchased materials; the expected level and timing of U.S. Department of Defense (“DoD”) and international defense customer procurement of products and services and funding or payments thereof; the Company’s ability to utilize material and components which it has committed to purchase from suppliers; higher material costs resulting from production variability due to uncertainty of timing of funding or payments from international defense customers; risks related to reductions in government expenditures in light of U.S. defense budget pressures, sequestration and an uncertain DoD tactical wheeled vehicle strategy; the impact of any DoD solicitation for competition for future contracts to produce military vehicles, including a future Family of Medium Tactical Vehicle (“FMTV”) production contract; the Company’s ability to increase prices to raise margins or offset higher input costs; increasing commodity and other raw material costs, particularly in a sustained economic recovery; risks related to facilities expansion, consolidation and alignment, including the amounts of related costs and charges and that anticipated cost savings may not be achieved; global economic uncertainty, which could lead to additional impairment charges related to many of the Company’s intangible assets and/or a slower recovery in the Company’s cyclical businesses than Company or equity market expectations; projected adoption rates of work at height machinery in emerging markets; the impact of severe weather or natural disasters that may affect the Company, its suppliers or its customers; risks related to the collectability of receivables, particularly for those businesses with exposure to construction markets; the cost of any warranty campaigns related to the Company’s products; risks related to production or shipment delays arising from quality or production issues; risks associated with international operations and sales, including compliance with the Foreign Corrupt Practices Act; the Company’s ability to comply with complex laws and regulations applicable to U.S. government contractors; cybersecurity risks and costs of defending against, mitigating and responding to a data security breach; and risks related to the Company’s ability to successfully execute on its strategic road map and meet its long-term financial goals. Additional information concerning these and other factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's U.S. Securities and Exchange Commission (“SEC”) filings, including, but not limited to, the Company's Current Report on Form 8-K filed with the SEC on April 28, 2016 and Item 1A. of Part II of this Quarterly Report on Form 10-Q.

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

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

General

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

Access equipment — aerial work platforms and telehandlers used in a wide variety of construction, agricultural, industrial, institutional and general maintenance applications to position workers and materials at elevated heights, as well as wreckers and

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car carriers. Access equipment customers include equipment rental companies, construction contractors, manufacturing companies, home improvement centers and towing companies in the U.S. and abroad.

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

Fire & emergency — custom and commercial firefighting vehicles and equipment, aircraft rescue and firefighting vehicles, snow removal vehicles, simulators and other emergency vehicles primarily sold to fire departments, airports and other governmental units, and broadcast vehicles sold to broadcasters and TV stations in the U.S. 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.

Executive Overview

The Company reported earnings per share of $0.76 in the second quarter of fiscal 2016 as compared to $0.69 in the second quarter of fiscal 2015 . Share repurchases completed during the previous twelve month period had the effect of increasing earnings per share in the second quarter of fiscal 2016 by $0.05 compared to the second quarter of fiscal 2015. Results in the second quarter of fiscal 2016 also benefited by $0.06 per share from discrete tax items. Results for the second quarter of fiscal 2015 included $14.7 million ($9.3 million, or $0.12 per share, after-tax) of debt extinguishment costs related to the refinancing of the Company's senior notes due 2020. Improved results in the defense, commercial and fire & emergency segments were more than offset by lower access equipment segment results, primarily related to lower sales levels, and start-up costs related to a shared production facility in Mexico. The lower sales and earnings in the access equipment segment were the result of a slowdown in North American replacement demand for access equipment that began in the summer of fiscal 2015 and lower telehandler demand after strong demand in the prior year quarter related to the transition to new Tier 4 engine emissions standards. Access equipment sales in the second quarter of fiscal 2016 were also negatively impacted by many rental companies taking a more cautious approach to their rental fleet capital expenditures, preferring to wait to make purchases until they had a better view of the 2016 construction market. While this cautious approach negatively impacted the second quarter fiscal 2016 results compared to the prior year quarter, as noted below, access equipment results for the second quarter of fiscal 2016 exceeded the Company's previous expectations.

Results for the second quarter of fiscal 2016 exceeded the Company's previous expectations, primarily in the access equipment and defense segments. The Company believes the better than expected results in the access equipment segment were due to timing as the Company believes that some customers placed their fleet orders earlier than previously expected as they gained confidence that the U.S. economy was not headed for a recession, that the U.S. construction outlook was solid and a relatively milder winter in the U.S. allowed construction activity to start earlier this year. The better than expected results in the defense segment were driven by higher aftermarket parts sales and sales of higher content vehicles along with improved operational performance. Based on the discrete tax benefits recorded in the second quarter and increased expectations for results in the defense segment, partially offset by expected higher corporate costs, the Company is raising its full year earnings per share outlook by $0.10, from a range of $2.20 to $2.60 to a range of $2.30 to $2.70.

The Company continued to execute on its goal to improve operational performance, evidenced by higher sales, operating income and operating income margins in the defense, fire & emergency and commercial segments. Additional highlights for the second quarter of fiscal 2016 included the withdrawal of the competitor protest of the Joint Light Tactical Vehicle ("JLTV") production contract awarded to the Company followed by the receipt of a $243 million order under the JLTV program for more than 650 vehicles, along with installed kits, related support and a license of the JLTV technical data package. The defense segment also received a contract from an international customer for more than 1,000 Mine Resistant Ambush Protected - All Terrain Vehicles (“M-ATVs”) during the quarter. The Company is currently working with the customer to finalize the funding and vehicle delivery schedule for the contract and, as a result, has not included any sales under this contract in its fiscal 2016 outlook and has not included this contract in backlog at March 31, 2016. While not in backlog, the Company is procuring inventory to allow for production of the units.

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Consolidated net sales decreased $29.9 million , or 1.9% , to $1.52 billion in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 . A near doubling of defense segment sales along with higher sales in both the fire & emergency and commercial segments almost completely offset a decline in access equipment segment sales. Compared to the prior year quarter, defense segment sales benefited from having a full quarter of Family of Heavy Tactical Vehicles ("FHTV") sales and the delivery of the remaining international M-ATVs under a contract the Company received last summer. The Company experienced a break in production on the FHTV in the second quarter of fiscal 2015 as a previous contract with the DoD had concluded.

Consolidated operating income decreased 16.7% to $91.4 million , or 6.0% of sales, in the second quarter of fiscal 2016 compared to $109.7 million , or 7.1% of sales, in the second quarter of fiscal 2015 . Improved operating income and operating income margins in the defense, fire & emergency and commercial segments was not enough to offset the operating income decline in the access equipment segment and increased start-up expenses at a shared production facility in Mexico.

Results of Operations

Analysis of Consolidated Net Sales

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



	Second Quarter Fiscal						First Six Months Fiscal
	2016			2015			2016			2015
Net sales:
Access equipment	$	754.3		$	981.8		$	1,284.1		$	1,698.5
Defense	297.0			158.7			615.0			428.0
Fire & emergency	240.4			202.9			447.9			369.9
Commercial	236.7			220.9			437.0			431.1
Intersegment eliminations and other	(4.1		)	(10.1		)	(7.7		)	(20.0		)
	$	1,524.3		$	1,554.2		$	2,776.3		$	2,907.5

Second Quarter Fiscal 2016 Compared to 2015

Consolidated net sales decreased $29.9 million , or 1.9% , to $1.52 billion in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 . Improved defense, fire & emergency and commercial segment sales almost completely offset lower sales in the access equipment segment.

Access equipment segment net sales decreased $227.5 million , or 23.2% , to $754.3 million in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 . The decline in sales was primarily due to the slowdown in North American replacement demand that began in the summer of fiscal 2015 and lower shipments of telehandlers in North America. In the second quarter of fiscal 2015, the access equipment segment experienced a large increase in telehandler sales related to the transition to Tier 4 engines.

Defense segment net sales increased $138.3 million , or 87.1% , to $297.0 million in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 . The increase in sales was primarily due to increased sales of FHTVs and international M-ATVs under a contract the Company received last summer. The Company experienced a break in production under the FHTV program in the second quarter of fiscal 2015.

Fire & emergency segment net sales increased $37.5 million , or 18.5% , to $240.4 million in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 . Sales in the second quarter of fiscal 2016 benefited from higher domestic fire apparatus deliveries as a result of increased production rates to meet higher demand and the delivery of a multi-unit international order. Improved operational efficiencies have allowed the fire & emergency segment to increase and maintain higher production rates.

Commercial segment net sales increased $15.8 million , or 7.1%, to $236.7 million in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 . The increase in sales was primarily attributable to higher refuse collection vehicle unit volume driven by fleet replenishment by private waste haulers and share gains.

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First Six Months of Fiscal 2016 Compared to 2015

Consolidated net sales decreased $131.2 million , or 4.5% , to $2.78 billion in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 . Higher sales in the defense and fire & emergency segments and, to a lesser extent, the commercial segment were not sufficient to offset a decline in sales in the access equipment segment. The strengthening U.S. dollar negatively impacted net sales in the first six months of fiscal 2016 by $20.7 million, or 70 basis points, compared to the first six months of fiscal 2015.

Access equipment segment net sales decreased $414.4 million , or 24.4% , to $1.28 billion in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 . The decline in sales was primarily due to the slowdown in North American replacement demand that began in the third quarter of fiscal 2015 and lower shipments of telehandlers in North America. In the first six months of fiscal 2015, the access equipment segment experienced a large increase in telehandler sales related to the transition to Tier 4 engines. A stronger U.S. dollar negatively impacted sales by $17.3 million, or 100 basis points, compared to the first six months of fiscal 2015.

Defense segment net sales increased $187.0 million , or 43.7% , to $615.0 million in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 . The increase in sales was primarily due to the sale of international M-ATVs under a contract the Company received last summer. Sales to the DoD were relatively unchanged in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 , as higher M-ATV reset and FHTV sales were offset by lower FMTV sales.

Fire & emergency segment net sales increased $78.0 million , or 21.1% , to $447.9 million in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 . Sales in the first six months of fiscal 2016 benefited from higher domestic fire apparatus deliveries and the delivery of several multi-unit international orders. Improved operational efficiencies have allowed the fire & emergency segment to increase fire apparatus production rates to meet increased demand.

Commercial segment net sales increased $5.9 million , or 1.4% , to $437.0 million in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 . The increase in sales was primarily attributable to higher refuse collection vehicle unit volume, offset in part by lower package sales, consisting of a purchased chassis and manufactured body, and lower concrete mixer unit volume.

Analysis of Consolidated Cost of Sales

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



	Second Quarter Fiscal					First Six Months Fiscal
	2016		2015			2016		2015
Cost of sales:
Access equipment	$	608.9	$	767.9		$	1,051.4	$	1,335.6
Defense	250.1		153.8			524.7		394.8
Fire & emergency	208.4		177.5			389.2		326.5
Commercial	194.8		188.8			363.6		364.8
Intersegment eliminations and other	2.8		(9.6		)	5.3		(19.7		)
	$	1,265.0	$	1,278.4		$	2,334.2	$	2,402.0

Second Quarter Fiscal 2016 Compared to 2015

Consolidated cost of sales was $1.27 billion , or 83.0% of sales, in the second quarter of fiscal 2016 compared to $1.28 billion , or 82.3% of sales, in the second quarter of fiscal 2015 . The 70 basis point increase in cost of sales as a percentage of sales in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 was largely due to a favorable vendor recovery settlement in the access equipment segment in the second quarter of the prior year (60 basis points) and start-up costs related to a shared production facility in Mexico (40 basis points).

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Access equipment segment cost of sales was $608.9 million , or 80.7% of sales, in the second quarter of fiscal 2016 compared to $767.9 million , or 78.2% of sales, in the second quarter of fiscal 2015 . The 250 basis point increase in cost of sales as a percentage of sales in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 was largely due to a more competitive pricing environment (120 basis points) and adverse manufacturing absorption (90 basis points) associated with lower production in the current year and a favorable vendor recovery settlement in the second quarter of fiscal 2015 (80 basis points).

Defense segment cost of sales was $250.1 million , or 84.2% of sales, in the second quarter of fiscal 2016 compared to $153.8 million , or 97.0% of sales, in the second quarter of fiscal 2015 . The 1,280 basis point decrease in cost of sales as a percent of sales in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 was primarily attributable to favorable product mix (920 basis points), contractual price increases (310 basis points) and improved absorption of fixed costs (240 basis points), offset in part by costs associated with a specific warranty campaign (210 basis points).

Fire & emergency segment cost of sales was $208.4 million , or 86.7% of sales, in the second quarter of fiscal 2016 compared to $177.5 million , or 87.5% of sales, in the second quarter of fiscal 2015. The 80 basis point decrease in cost of sales as a percent of sales in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 was primarily attributable to improved production efficiencies and absorption (90 basis points).

Commercial segment cost of sales was $194.8 million , or 82.3% of sales, in the second quarter of fiscal 2016 compared to $188.8 million , or 85.4% of sales, in the second quarter of fiscal 2015 . The 310 basis point decrease in cost of sales as a percentage of sales in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 was largely due to favorable product mix (200 basis points) due to lower package sales and improved production absorption (90 basis points).

Intersegment eliminations and other includes intercompany profit on inter-segment sales not yet sold to third party customers as well as shared manufacturing plant start-up costs not allocated to segments.

First Six Months of Fiscal 2016 Compared to 2015

Consolidated cost of sales was $2.33 billion , or 84.1% of sales, in the first six months of fiscal 2016 compared to $2.40 billion , or 82.6% of sales, in the first six months of fiscal 2015 . The 150 basis point increase in cost of sales as a percentage of sales in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 was largely due to adverse production absorption associated with lower production in the access equipment segment and start-up costs to ramp-up production levels in the defense segment (combined 70 basis points) and start-up costs related to a shared production facility in Mexico (50 basis points).

Access equipment segment cost of sales was $1.05 billion , or 81.9% of sales, in the first six months of fiscal 2016 compared to $1.34 billion , or 78.6% of sales, in the first six months of fiscal 2015 . The 330 basis point increase in cost of sales as a percentage of sales in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 was largely due to adverse manufacturing absorption (180 basis points) associated with lower production and a more competitive pricing environment (90 basis points) in the current year period and a favorable vendor recovery settlement in the second quarter of fiscal 2015 (50 basis points).

Defense segment cost of sales was $524.7 million , or 85.3% of sales, in the first six months of fiscal 2016 compared to $394.8 million , or 92.3% of sales, in the first six months of fiscal 2015 . The 700 basis point decrease in cost of sales as a percent of sales in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 was primarily attributable to favorable product mix (500 basis points) and contractual price increases (370 basis points), offset in part by costs associated with a specific warranty campaign (80 basis points) and the absence of a pension and other postretirement curtailment benefit recorded in the first six months of fiscal 2015 (70 basis points).

Fire & emergency segment cost of sales was $389.2 million , or 86.9% of sales, in the first six months of fiscal 2016 compared to $326.5 million , or 88.3% of sales, in the first six months of fiscal 2015 . The 140 basis point decrease in cost of sales as a percent of sales in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 was primarily attributable to favorable pricing (110 basis points) and improved production efficiencies and absorption (80 basis points).

Commercial segment cost of sales was $363.6 million , or 83.2% of sales, in the first six months of fiscal 2016 compared to $364.8 million , or 84.6% of sales, in the first six months of fiscal 2015 . The 140 basis point decrease in cost of sales as a percentage of sales in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 was largely due to favorable product mix (180 basis points) due to lower package sales, offset in part by increased warranty costs (50 basis points).

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Analysis of Consolidated Operating Income (Loss)

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



	Second Quarter Fiscal						First Six Months Fiscal
	2016			2015			2016			2015
Operating income (loss):
Access equipment	$	75.7		$	136.9		$	96.1		$	214.1
Defense	27.8			(12.0		)	51.0			(2.2		)
Fire & emergency	14.9			9.0			25.0			10.5
Commercial	17.2			8.6			26.1			21.0
Corporate	(44.2		)	(32.8		)	(76.5		)	(68.1		)
Intersegment eliminations	—			—			—			0.1
	$	91.4		$	109.7		$	121.7		$	175.4

Second Quarter Fiscal 2016 Compared to 2015

Consolidated operating income decreased 16.7% to $91.4 million , or 6.0% of sales, in the second quarter of fiscal 2016 compared to $109.7 million , or 7.1% of sales, in the second quarter of fiscal 2015 . The decline in operating income in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 was driven by lower access equipment segment sales and higher corporate costs, offset in part by improved performance in the defense, fire & emergency and commercial segments.

Access equipment segment operating income decreased 44.7% to $75.7 million , or 10.0% of sales, in the second quarter of fiscal 2016 compared to $136.9 million , or 13.9% of sales, in the second quarter of fiscal 2015 . The decrease in operating income in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 was primarily the result of the lower gross income associated with lower sales volume (down $59 million) and a challenging pricing environment (down $11 million), adverse manufacturing absorption ($3 million) as the business significantly reduced production rates compared to the prior year quarter and the impact of a prior year benefit associated with a favorable vendor recovery settlement $7.8 million, offset in part by lower spending on engine emissions standards changes (down $10 million).

Defense segment operating income increased 333.0% to $27.8 million , or 9.4% of sales, in the second quarter of fiscal 2016 compared to an operating loss of $12.0 million , or 7.5% of sales, in the second quarter of fiscal 2015 . The increase in operating results in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 was largely due to higher gross income associated with higher sales (up $21 million) and favorable product mix.

Fire & emergency segment operating income increased 66.0% to $14.9 million , or 6.2% of sales, in the second quarter of fiscal 2016 compared to $9.0 million , or 4.4% of sales, in the second quarter of fiscal 2015 . The increase in operating results in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 was largely due to higher gross income on higher sales volume (up $8 million).

Commercial segment operating income increased 99.0% to $17.2 million , or 7.3% of sales, in the second quarter of fiscal 2016 compared to $8.6 million , or 3.9% of sales, in the second quarter of fiscal 2015 . The increase in operating income in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 was primarily a result of improved product mix and higher gross income associated with higher sales volume (up $4 million).

Corporate operating loss increased $11.4 million to $44.2 million in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 . The increase in corporate operating loss in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 was primarily due to increased costs to support the start-up of a shared production facility (up $8 million) and higher health care costs.

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Consolidated selling, general and administrative expenses increased 1.2% to $154.7 million , or 10.1% of sales, in the second quarter of fiscal 2016 compared to $152.8 million , or 9.8% of sales, in the second quarter of fiscal 2015 . The increase in consolidated selling, general and administrative expenses in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 was generally a result of increased medical costs, offset in part by reductions in travel and outside services spending.

First Six Months of Fiscal 2016 Compared to 2015

Consolidated operating income decreased 30.6% to $121.7 million , or 4.4% of sales, in the first six months of fiscal 2016 compared to $175.4 million , or 6.0% of sales, in the first six months of fiscal 2015 . The decline in operating income was driven by the lower gross income associated with lower access equipment segment sales and start-up costs associated with a shared production facility in Mexico, offset in part by improved performance in the defense, fire & emergency and commercial segments.

Access equipment segment operating income decreased 55.1% to $96.1 million , or 7.5% of sales, in the first six months of fiscal 2016 compared to $214.1 million , or 12.6% of sales, in the first six months of fiscal 2015 . The decrease in operating income was primarily the result of the lower gross income associated with lower sales volume (down $112 million) and a challenging pricing environment (down $15 million), offset in part by lower spending (down $17 million) on engine emissions standards changes. Results for the first six months of fiscal 2015 also benefited from a $7.8 million vendor recovery settlement.

Defense segment operating income increased 2,462.2% to $51.0 million or 8.3% of sales, in the first six months of fiscal 2016 compared to an operating loss of $2.2 million , or 0.5% of sales, in the first six months of fiscal 2015 . Defense segment results for the first six months of fiscal 2015 included a $3.4 million other postretirement curtailment benefit. The increase in operating income was largely due to favorable product mix and higher gross income associated with higher sales (up $29 million).

Fire & emergency segment operating income increased 138.0% to $25.0 million , or 5.6% of sales, in the first six months of fiscal 2016 compared to $10.5 million , or 2.8% of sales, in the first six months of fiscal 2015 . Higher gross income on higher sales volume was the largest contributor to the increase in operating income.

Commercial segment operating income increased 24.1% to $26.1 million , or 6.0% of sales, in the first six months of fiscal 2016 compared to $21.0 million , or 4.9% of sales, in the first six months of fiscal 2015 . The increase in operating income was primarily a result of higher gross income associated with higher sales volume (up $2 million) and favorable product mix.

Corporate operating loss increased $8.4 million to $76.5 million in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 . The increase in corporate operating loss in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 was primarily due to increased costs to support the start-up of a shared production facility in Mexico (up $14 million), offset by lower information technology expense (down $3 million).

Consolidated selling, general and administrative expenses decreased 3.1% to $294.0 million , or 10.6% of sales, in the first six months of fiscal 2016 compared to $303.3 million , or 10.4% of sales, in the first six months of fiscal 2015 . The reduction in consolidated selling, general and administrative expenses in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 was generally a result of reductions in travel and outside services spending and lower incentive compensation, offset in part by increased medical costs.

Analysis of Non-Operating Income Statement Items

Second Quarter Fiscal 2016 Compared to 2015

Interest expense net of interest income decreased $13.1 million to $15.1 million in the second quarter of fiscal 2016 compared to the second quarter of fiscal 2015 . The decrease in interest expense net of interest income was primarily due to $14.7 million of debt extinguishment costs the Company incurred during the second quarter of fiscal 2015 in connection with the refinancing of portions of the Company’s long-term debt. The benefit of lower interest rates on the senior notes refinanced in the second quarter of fiscal 2015 was more than offset by increased borrowings to support increased working capital.

Other miscellaneous expense of $1.0 million in the second quarter of fiscal 2016 and other miscellaneous income of $1.3 million in the second quarter of fiscal 2015 primarily related to net foreign currency transaction gains and losses.

The Company recorded income tax expense of $20.3 million in the second quarter of fiscal 2016 , or 27.0% of pre-tax income, compared to $29.5 million , or 35.7%, of pre-tax income in the second quarter of fiscal 2015 . Results for the second

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quarter of fiscal 2016 were favorably impacted by discrete tax benefits related to a change in a filing position on the Company's fiscal 2015 income tax return and reduction in liability related to expiration of statutes of limitations (580 basis points). Further, the reinstatement of the U.S. research and development tax credit favorably benefited the second quarter of fiscal 2016 by 100 basis points. Results for the second quarter of fiscal 2015 were adversely impacted by a change in estimated full year tax rate (170 basis points).

Equity in earnings of unconsolidated affiliates of $1.1 million in the second quarter of fiscal 2016 and $1.3 million in the second quarter of fiscal 2015 primarily represented the Company’s equity interest in a commercial entity in Mexico and a joint venture in Europe.

First Six Months of Fiscal 2016 Compared to 2015

Interest expense net of interest income decreased $12.6 million to $29.2 million in the first six months of fiscal 2016 compared to the first six months of fiscal 2015 . The Company incurred $14.7 million of debt extinguishment costs in connection with the refinancing of portions of the Company’s long-term debt during the first six months of fiscal 2015 . The benefit of lower interest rates on the senior notes refinanced in the second quarter of fiscal 2015 was offset by increased borrowings to support increased working capital.

Other miscellaneous expense of $1.0 million in the first six months of fiscal 2016 primarily related to net foreign currency transaction gains and losses.

The Company recorded income tax expense of $22.0 million in the first six months of fiscal 2016 , or 24.1% of pre-tax income, compared to $45.7 million , or 34.2% , of pre-tax income in the first six months of fiscal 2015 . Results for the first six months of fiscal 2016 were favorably impacted by discrete tax benefits, including a change in filing position on the Company's 2015 federal income tax return (380 basis points), the retroactive reinstatement of the U.S. research and development tax credit (260 basis points) and reductions in reserves for uncertain tax benefits (220 basis points), related to interest and expiration of statutes of limitations. Results for the first six months of fiscal 2016 also include the on-going benefit of the U.S. research and development tax credit (100 basis points). Results for the first six months of fiscal 2015 were impacted by discrete tax benefits (160 basis points) resulting from the reinstatement of the U.S. research and development tax credit and other discrete tax charges (80 basis points).

Equity in earnings of unconsolidated affiliates of $1.2 million in the first six months of fiscal 2016 and $1.4 million in the first six months of fiscal 2015 primarily represented the Company’s equity interest in a commercial entity in Mexico and a joint venture in Europe.

Liquidity and Capital Resources

Financial Condition at March 31, 2016

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



	March 31,			September 30,
	2016			2015
Cash and cash equivalents	$	38.4		$	42.9
Total debt	1,000.7			938.5
Shareholders’ equity	1,874.4			1,911.1
Total capitalization (debt plus equity)	2,875.1			2,849.6
Debt to total capitalization	34.8		%	32.9		%

The Company generates significant capital resources from operating activities, which is the expected primary source of funding for its operations. At March 31, 2016 , the Company had cash and cash equivalents of $38.4 million , a majority of which is located in the United States. The Company expects to meet its fiscal 2016 U.S. funding needs without repatriating undistributed profits that are indefinitely reinvested outside the United States. In addition to cash and cash equivalents, the Company had $604.8 million of unused available capacity under the Revolving Credit Facility (as defined in “Liquidity”) as of March 31,

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2016 . Borrowings under the Revolving Credit Facility could, as discussed below, be limited by the financial covenants contained in the Credit Agreement (as defined in “Liquidity”).

The Company's ratio of debt to total capitalization of 34.8% at March 31, 2016 remained within its targeted range. The Company's capital structure in the first six months of fiscal 2016 was impacted by the Company's repurchase of 2.5 million shares of its Common Stock in the period at an aggregate cost of $100.1 million . As of March 31, 2016 , the Company had approximately 7.5 million shares of Common Stock remaining under the repurchase authorization approved by the Company's Board of Directors in August 2015.

Consolidated days sales outstanding (defined as “Trade Receivables” at quarter end divided by “Net Sales” for the most recent quarter multiplied by 90 days) increased from 50 days at September 30, 2015 to 58 days at March 31, 2016 . The increase in days sales outstanding is primarily related to the defense segment. Days sales outstanding for segments other than the defense segment increased one day, from 53 days at September 30, 2015 to 54 days at March 31, 2016 . Days sales outstanding in the defense segment increased from 38 days at September 30, 2015 to 75 days at March 31, 2016 as the Company is experiencing a slowdown in payments from its international customers. Consolidated inventory turns (defined as “Cost of Sales” on an annualized basis, divided by the average “Inventory” at the past five quarter end periods) decreased from 4.3 times at September 30, 2015 to 3.5 times at March 31, 2016 as a result of the decline in sales during the first six months of fiscal 2016 on relatively consistent inventory levels. The Company has commitments to purchase materials and components based on future delivery requirements under international contracts. If the Company is not successful in securing timely funding for these contracts, working capital could increase. The Company believes that it has sufficient liquidity to fund these working capital requirements in the event that funding under the international contracts is delayed.

Cash Flows

Operating Cash Flows

Operating activities generated $94.5 million of cash in the first six months of fiscal 2016 compared to a net use of cash of $70.7 million in the first six months of fiscal 2015 . Cash used by operating activities in the first six months of fiscal 2015 was primarily due to inventory build in the access equipment segment.

Investing Cash Flows

Investing activities used cash of $37.9 million in the first six months of fiscal 2016 compared to $73.4 million in the first six months of fiscal 2015 . Capital spending, excluding equipment held for rental, of $40.3 million in the first six months of fiscal 2016 reflected a decrease of $29.5 million compared to capital spending in the first six months of fiscal 2015 largely as a result of investments the Company made in its vertical integration strategy in the first six months of fiscal 2015. In fiscal 2016, the Company expects capital spending to be approximately $100 million.

Financing Cash Flows

Financing activities resulted in a net use of cash of $63.1 million in the first six months of fiscal 2016 compared to a net use of cash of $119.0 million in the first six months of fiscal 2015 . In the first six months of fiscal 2016 and 2015 , the Company repurchased shares of its Common Stock under its share repurchase authorization at an aggregate cost of $100.1 million and $88.1 million , respectively. During the first six months of fiscal 2016, the Company utilized net proceeds under the Revolving Credit Facility of $68.7 million to fund capital needs and stock repurchases.

Liquidity

The Company's primary sources of liquidity are cash flows generated from operations, availability under the Revolving Credit Facility and available cash and cash equivalents. In addition to cash and cash equivalents of $38.4 million , a majority of which is located in the United States, the Company had $604.8 million of unused availability under the Revolving Credit Facility as of March 31, 2016 . These sources of liquidity are needed to fund the Company's working capital requirements, debt service requirements, capital expenditures, share repurchases and dividends. The Company expects to have sufficient liquidity to finance its operations over the next twelve months.

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Senior Secured Credit Agreement

In March 2014, the Company entered into an Amended and Restated Credit Agreement with various lenders (the “Credit Agreement”). The Credit Agreement provides for (i) a revolving credit facility (“Revolving Credit Facility”) that matures in March 2019 with an initial maximum aggregate amount of availability of $600.0 million and (ii) a $400.0 million term loan due in quarterly principal installments of $5.0 million with a balloon payment of $310.0 million due at maturity in March 2019. In January 2015, the Company entered into an agreement with lenders under the Credit Agreement that increased the Revolving Credit Facility by $250.0 million to an aggregate maximum amount of $850.0 million. Refer to Note 8 of the Notes to Condensed Consolidated Financial Statements for additional information regarding the Credit Agreement.

Covenant Compliance

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 consolidated EBITDA to the Company’s consolidated cash interest expense) as of the last day of any fiscal quarter of 2.50 to 1.0.


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

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

The Company was in compliance with the financial covenants contained in the Credit Agreement as of March 31, 2016 and expects to be able to meet the financial covenants contained in the Credit Agreement over the next twelve months.

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


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

Senior Notes

Refer to Note 8 of the Notes to Condensed Consolidated Financial Statements for additional information regarding the Company’s outstanding debt as of March 31, 2016 .

Contractual Obligations, Commercial Commitments and Off-Balance Sheet Arrangements

The Company's contractual obligations, commercial commitments and off-balance sheet arrangement disclosures in its Annual Report on Form 10-K for the year ended September 30, 2015 have not materially changed since that report was filed.

Application of Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires the Company to make judgments, assumptions and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. The Company's disclosures of critical accounting policies in its Annual Report on Form 10-K for the year ended September 30, 2015 have not materially changed since that report was filed.

Critical Accounting Estimates

The Company's disclosures of critical accounting estimates in its Annual Report on Form 10-K for the year ended September 30, 2015 have not materially changed since that report was filed.

New Accounting Standards

Refer to Note 2 of the Notes to Condensed Consolidated Financial Statements for a discussion of the impact on the Company’s Condensed Consolidated Financial Statements of new accounting standards.

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Customers and Backlog

Sales to the U.S. government comprised approximately 20% of the Company’s net sales in the first six months of fiscal 2016 . No other single customer accounted for more than 10% of the Company’s net sales for this period. A significant portion of the Company’s net sales are derived from customer orders prior to commencing production.

The Company’s backlog at March 31, 2016 increased 58.2% to $3.54 billion compared to $2.24 billion at March 31, 2015 . Access equipment segment backlog increased 1.6% to $664.8 million at March 31, 2016 compared to $654.1 million at March 31, 2015 . Defense segment backlog increased 192.8% to $1.68 billion at March 31, 2016 compared to $573.9 million at March 31, 2015 due largely to new domestic contract awards. Fire & emergency segment backlog increased 26.2% to $903.4 million at March 31, 2016 compared to $716.1 million at March 31, 2015 due primarily to increased orders for domestic fire apparatus as a result of market growth and share gains. Commercial segment backlog decreased 0.8% to $289.4 million at March 31, 2016 compared to $291.8 million at March 31, 2015 . Unit backlog for concrete mixers was down 0.1% at March 31, 2016 compared to March 31, 2015 . Unit backlog for refuse collection vehicles was up 4.3% at March 31, 2016 compared to March 31, 2015 .

Reported backlog excludes purchase options and announced orders for which definitive contracts have not been executed. Backlog information and comparisons thereof as of different dates may not be accurate indicators of future sales or the ratio of the Company’s future sales to the DoD versus its sales to other customers. Approximately 43% of the Company’s March 31, 2016 backlog is not expected to be filled in fiscal 2016 . The Company's 2016 backlog excludes a contract award from an international customer for over 1,000 M-ATVs as the Company works with the customer to finalize funding and vehicle delivery schedules.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's quantitative and qualitative disclosures about market risk for changes in interest rates and commodity risk, which are incorporated by reference to Item 7A of the Company's Annual Report on Form 10-K for the year ended September 30, 2015 , have not materially changed since that report was filed.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. In accordance with Rule 13a-15(b) of the Exchange Act, the Company’s management evaluated, with the participation of the Company’s President and Chief Executive Officer and Executive Vice President and Chief Financial Officer, the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the quarter ended March 31, 2016 . Based upon their evaluation of these disclosure controls and procedures, the President and Chief Executive Officer and the Executive Vice President and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the quarter ended March 31, 2016 to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission rules and forms, and to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting. There were no changes in the Company's internal control over financial reporting that occurred during the quarter ended March 31, 2016 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

The Company’s financial position, results of operations and cash flows are subject to various risks, many of which are not exclusively within the Company’s control, which may cause actual performance to differ materially from historical or projected future performance. In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Item 1A. of our Annual Report on Form 10-K for the year ended September 30, 2015 , which have not materially changed other than as reflected below.

Certain of our markets are highly cyclical. Declines in these markets could have a material adverse effect on our operating performance.

The high levels of sales in our defense segment between fiscal 2002 and 2013 were due in significant part to demand for defense tactical wheeled vehicles, replacement parts and services (including armoring) and vehicle remanufacturing arising from the conflicts in Iraq and Afghanistan. Events such as these are unplanned, as is the demand for our products that arises out of such events. Virtually all U.S. troops were withdrawn from Iraq during 2011 and from Afghanistan during 2014. These troop redeployments resulted in significant reductions in the level of defense funding allocated to support U.S. military involvement in those conflicts. In addition, current economic and political conditions continue to put significant pressure on the U.S. federal budget, including the defense budget. Current and projected DoD budgets have significantly lower funding for our vehicles than we experienced during the Iraq and Afghanistan conflicts. The DoD could also seek to reprogram certain funds originally planned for the purchase of vehicles manufactured by us under the current defense budget allocations. In addition, the Budget Control Act of 2011 contained an automatic sequestration feature that may require additional cuts to defense spending through fiscal 2023 if the budget caps within the agreement are exceeded. The two-year U.S. federal budget agreement signed by the President in December 2015 removed the threat of sequestration in the U.S. federal government’s fiscal 2016 and 2017 budget, but absent future budget agreements, the full effect of sequestration could return in the government’s fiscal 2018 budget. The magnitude of the adverse impact that federal budget pressures will have on funding for Oshkosh defense programs is unknown. Furthermore, our defense business may fluctuate significantly from time to time as a result of the start and completion of existing and new domestic and international contract awards that we may receive.

The access equipment market is highly cyclical and impacted (i) by the strength of economies in general, (ii) by residential and non-residential construction spending, (iii) by the ability of rental companies to obtain third-party financing to purchase revenue generating assets, (iv) by capital expenditures of rental companies in general, including the rate at which they replace aged rental equipment, which is impacted in part by historical purchase levels, including lower levels of purchasing during the Great Recession, which the Company believes is contributing to a slowdown in access equipment sales, (v) by the timing of engine emissions standards changes, and (vi) by other factors, including oil and gas related activity. The ready-mix concrete market that we serve is highly cyclical and impacted by the strength of the economy generally, 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, including the impact of federal legislation, such as the $325 billion, six-year Surface Transportation Reauthorization and Reform Act of 2015, which is also known as the 2015 Federal Highway Bill. Refuse collection vehicle markets are also cyclical and impacted by the strength of economies in general, by municipal tax receipts and by the size and timing of capital expenditures by large waste haulers. Fire & emergency markets are cyclical later in an economic downturn and are impacted by the economy generally and by municipal tax receipts and capital expenditures.

The global economic recovery has progressed at a slow pace, which has negatively impacted sales volumes for our access equipment, commercial and fire & emergency products as compared to historical levels. Lower U.S. and European housing starts and non-residential construction spending compared to historical levels is limiting potential sales volume increases in the access equipment and commercial segments. In addition, lower U.S. housing starts versus historical levels since fiscal 2008 also adversely impacted municipal tax revenue, which negatively impacted demand for refuse collection vehicles and fire apparatus and delayed the recovery in these markets. While demand in our access equipment markets has rebounded from historical lows that we experienced during the Great Recession, such demand is dependent on global economies and may not be sustainable. During the second half of fiscal 2015 and the first half of fiscal 2016, we experienced a slowdown in access equipment and concrete mixer orders and purchases due to severe weather and rains during our second and third quarters of fiscal 2015 and the

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impact of lower oil and gas prices on access equipment rental utilization. We believe this slowdown will continue for the remainder of fiscal 2016. A lack of sustained improvement in residential and non-residential construction spending generally may result in our inability to achieve our sales expectations or cause future weakness in demand for our products. We currently believe construction-driven demand will not be adequate to fully offset anticipated reduced access equipment replacement demand resulting from very low industry purchases in 2009 and 2010 leading to an expected 13% to 18% sales decline in our access equipment segment in fiscal 2016. Despite U.S. construction growth over the past year and an aged installed base, access equipment and concrete mixer customers have adopted a cautious approach to fleet replacement/expansion, generally wanting to confirm that the construction market in the U.S. gets off to a good start in 2016 before fully committing to their desired equipment purchasing plans. All of these factors, whether taken together or individually, could result in lower demand for our products. We cannot provide any assurance that the slow economic recovery will not progress even more slowly than what we or the market expect. If the global economic recovery progresses more slowly than what we or the market expect, then there could be a material adverse effect on our net sales, financial condition, profitability and/or cash flows.

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 timing of orders for the traditional construction season in the Northern hemisphere can be impacted by weather conditions.

We may not be able to execute on our MOVE strategy.

We previously announced a roadmap, our MOVE strategy, to deliver long-term growth and earnings for our shareholders. We are continuing to pursue our MOVE strategy in fiscal 2016 and beyond. The long-term growth and earnings that we expect to achieve as a result of our MOVE strategy are based on certain assumptions we have made, which assumptions may prove to be incorrect. We cannot provide any assurance we will be able to successfully execute our MOVE strategy, which is subject to a variety of risks, including the following:


•	A lower or slower than expected recovery in housing starts and non-residential construction spending in the U.S., including a scenario where lower oil and gas industry activity as a result of lower oil and gas prices leads to a broader slowdown in residential and non-residential construction activity;


•	A slower or less significant recovery in any of our global markets than we expect, especially in the access equipment markets in Europe, Australia and Latin America and the concrete mixer and refuse collection vehicle markets in North America where the recovery has been slower than expected;


•	Greater than expected declines in DoD tactical wheeled vehicle spending;


•	Adverse impacts of a continued strong U.S. dollar compared to other currencies globally on the competitiveness of our U.S. exports to global markets and on the translation of foreign operating results into U.S. dollars;


•	Our inability to design new products that meet our customers’ requirements and bring them to market;


•	Our inability to adjust our cost structure in response to lower access equipment and concrete mixer sales;


•	Higher costs than anticipated to launch new products or delays in new product launches;


•	Greater than expected pressure on municipal budgets;


•	Our inability to raise prices to offset cost increases or increase margins;


•	The possibility that commodity cost escalations could erode profits;


•	Low cost competitors aggressively entering one or more of our markets with significantly lower pricing;


•	Primary competitors vying for share gains through aggressive price competition;


•	Our inability to obtain and retain adequate resources to support production ramp-ups, including management personnel;


•	The inability of our supply base to keep pace with the economic recovery;


•	Our failure to realize product, process and overhead cost reduction targets;


•	Slow adoption of our products in emerging markets and/or our inability to successfully execute our emerging market growth strategy; and

•

Uncertainty regarding timing of funding or payments on key large international defense tactical wheeled vehicle contracts, including contracts for M-ATVs. If we do not receive timely funding or payments under those contracts, then we could incur higher interest costs. Further, we have made commitments to purchase materials and components based on the expectation that we would receive timely funding or payments under those M-ATV contracts. If we do not receive timely funding or payments under those M-ATV contracts, disruptions may result to our manufacturing schedule, and correspondingly to our suppliers, that will cause us to record higher product costs and potentially charges for excess or obsolete inventory to the extent we build product and are unable to complete contracts or find alternate uses for the materials and components and cannot otherwise realize value for them.

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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. Approximately 15% of our sales in fiscal 2015 were to the DoD. 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 changes 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, the withdrawal of U.S. troops from Iraq and Afghanistan, sequestration and the level of defense funding that will be allocated to the DoD's tactical wheeled vehicle strategy generally.


•	The U.S. government may not budget for or 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. Current and projected DoD budgets include significantly lower funding for our vehicles than we experienced during the Iraq and Afghanistan conflicts.

•

The funding of U.S. government programs is subject to an annual congressional budget authorization and appropriation process. In years when the U.S. government has not completed its budget process before the end of its fiscal year, government operations are typically funded pursuant to a “continuing resolution,” which allows federal government agencies to operate at spending levels approved in the previous budget cycle, but does not authorize new spending initiatives. When the U.S. government operates under a continuing resolution, delays can occur in the procurement of the products, services and solutions that we provide and may result in new initiatives being delayed or canceled, or funds could be reprogrammed away from our programs to pay for higher priority operational needs. In years when the U.S. government fails to complete its budget process or to provide for a continuing resolution, a federal government shutdown may result, similar to that which occurred in October 2013. This could in turn result in the delay or cancellation of key programs, which could have a negative effect on our cash flows and adversely affect our future results. In addition, payments to contractors for services performed during a federal government shutdown may be delayed, which would have a negative effect on our cash flows.


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


•	Certain of our government contracts for the U.S. Army and U.S. Marine Corps could be delayed or terminated, and all such contracts expire in the future and may not be replaced, which could reduce revenues that we expect under the contracts and negatively affect margins in our defense segment.

•

The Competition in Contracting Act requires competition for U.S. defense programs in most circumstances. Competition for DoD programs that we currently have could result in the U.S. government awarding future contracts to another manufacturer or the U.S. government awarding the contracts to us at lower prices and operating margins than we experience under the current contracts. In particular, the DoD has begun a process to solicit interest from potential suppliers to manufacture the FMTV. We expect the U.S. government will issue requests for proposal from interested parties in fiscal 2016 for proposal submission sometime in fiscal 2017 and award a new FMTV production contract to the successful bidder sometime thereafter. In addition, the U.S. government has become more aggressive in seeking to acquire the intellectual property and design rights to our current and potential future programs to facilitate competition for manufacturing our vehicles. Sale of intellectual property and design rights to the DoD was an evaluation factor in the JLTV production contract competition and may be an evaluation factor in other future U.S. government contract competitions.

•

Defense tactical wheeled vehicles contract awards that we receive may be subject to protests or lawsuits by competing bidders, which protests or lawsuits, if successful, could result in the DoD revoking part or all of any defense tactical wheeled vehicles 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 JLTV 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. Under the JLTV contract, we bear the risk of material, labor and overhead cost escalation for the full eight years of the contract, which is three to five years longer than has been the case under our other defense contracts.


•	We must 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.


•	Our defense products undergo rigorous testing by the customer and are subject to highly technical requirements. Our products are inspected extensively by the DoD prior to acceptance to determine adherence to contractual technical and quality requirements. The recently awarded JLTV contract contains product testing requirements that are generally

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more extreme than our other DoD contracts. Any failure to pass these tests or to comply with these requirements could result in unanticipated retrofit and rework costs, vehicle design changes, delayed acceptance of vehicles, late or no payments under such contracts or cancellation of the contract to provide vehicles to the U.S. government.

•

As a U.S. government contractor, our U.S. government contracts and systems are subject to audit and review by the Defense Contract Audit Agency and the Defense Contract Management Agency. These agencies review our performance under our U.S. government contracts, our cost structure and our compliance with laws and regulations applicable to U.S. government contractors. Systems that are subject to review include, but are not limited to, our accounting systems, estimating systems, material management systems, earned value management systems, purchasing systems and government property systems. If improper or illegal activities, errors or system inadequacies come to the attention of the U.S. government, as a result of an audit or otherwise, then we may be subject to civil and criminal penalties, contract adjustments and/or agreements to upgrade existing systems as well as administrative sanctions that may include the termination of our U.S. government contracts, forfeiture of profits, suspension of payments, fines and, under certain circumstances, suspension or debarment from future U.S. government contracts for a period of time. Whether or not illegal activities are alleged and regardless of materiality, the U.S. government also has the ability to decrease or withhold certain payments when it deems systems subject to its review to be inadequate. These laws and regulations affect how we do business with our customers and, in many instances, impose added costs on our business.

•

Our defense tactical wheeled vehicle contracts are large in size and require significant personnel and production resources, and when our defense tactical wheeled vehicle customers allow such contracts to expire or significantly reduce their vehicle requirements under such contracts, we must make adjustments to personnel and production resources. The start and completion of existing and new contract awards that we may receive can cause our defense business to fluctuate significantly. During the past two years, we have completed significant reductions to our production and office workforce within our defense segment. If we are unable to effectively ramp up our workforce, as we are currently starting to do to support the JLTV program, our future earnings and cash flows would be adversely affected.

•

In the event of component availability constraints, the U.S. government has the ability to unilaterally divert the supply of components used on multiple government programs to those programs rated most urgent (DX-rated programs). This could result in the U.S. government diverting the supply of component parts necessary for the production of vehicles under our U.S. defense contracts to other contractors.


•	We periodically experience difficulties with sourcing sufficient vehicle carcasses from the U.S. military to maintain our defense tactical wheeled vehicles remanufacturing schedule, which can create uncertainty and inefficiencies for this area of our business.

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

Common Stock Repurchases

On August 31, 2015, the Company's Board of Directors increased the Company's authorization to repurchase shares of the Company's Common Stock by 10,000,000 shares, taking the authorized number of shares of Common Stock available for repurchase to 10,299,198 as of that date. As of March 31, 2016 , the Company had repurchased 2,786,624 shares of Common Stock under this authorization. As a result, 7,512,574 shares of Common Stock remained available for repurchase under the repurchase authorization at March 31, 2016 . The Company can use this authorization at any time as there is no expiration date associated with the authorization. From time to time, the Company may enter into a Rule 10b5-1 trading plan for the purpose of repurchasing shares under this authorization. The Company did not repurchase any shares of the Company's Common Stock under this authorization during the second quarter of fiscal 2016.

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

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ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 6. EXHIBITS

Exhibit No. Description


10.1	Severance Agreement, effective as of January 1, 2016 between Oshkosh Corporation and Wilson R. Jones.*


10.2	Key Executive Employment and Severance Agreement between Oshkosh Corporation and Wilson R. Jones.*


31.1	Certification by the President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act, dated April 28, 2016 .


31.2	Certification by the Executive Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act, dated April 28, 2016 .


32.1	Written Statement of the President and Chief Executive Officer, pursuant to 18 U.S.C. §1350, dated April 28, 2016 .


32.2	Written Statement of the Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C. §1350, dated April 28, 2016 .

101

The following materials from Oshkosh Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 are filed herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income, (ii) the Condensed Consolidated Statements of Comprehensive Income, (iii) the Condensed Consolidated Balance Sheets, (iv) the Condensed Consolidated Statements of Shareholders' Equity, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.

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SIGNATURES

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



		OSHKOSH CORPORATION

April 28, 2016	By	/s/ Wilson R. Jones
		Wilson R. Jones, President and Chief Executive Officer

April 28, 2016	By	/s/ David M. Sagehorn
		David M. Sagehorn, Executive Vice President and Chief Financial Officer (Principal Financial Officer)

April 28, 2016	By	/s/ Thomas J. Polnaszek
		Thomas J. Polnaszek, Senior Vice President Finance and Controller (Principal Accounting Officer)

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EXHIBIT INDEX

Exhibit No. Description


10.1	Severance Agreement, effective as of January 1, 2016 between Oshkosh Corporation and Wilson R. Jones.*


10.2	Key Executive Employment and Severance Agreement between Oshkosh Corporation and Wilson R. Jones.*


31.1	Certification by the President and Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act, dated April 28, 2016 .


31.2	Certification by the Executive Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act, dated April 28, 2016 .


32.1	Written Statement of the President and Chief Executive Officer, pursuant to 18 U.S.C. §1350, dated April 28, 2016 .


32.2	Written Statement of the Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C. §1350, dated April 28, 2016 .

101

Exhibit 10.1

SEVERANCE AGREEMENT

THIS SEVERANCE AGREEMENT, effective as of the 1st day of January, 2016 (this “Agreement”), is by and between OSHKOSH CORPORATION, a Wisconsin corporation (the “Company”), and Wilson R. Jones (the “Executive”).

WITNESSETH:

WHEREAS, the Executive has been serving as the Company’s President and Chief Operating Officer and is being appointed as the Company’s Chief Executive Officer effective as of January 1, 2016;

WHEREAS, in connection with the Executive’s appointment as the Company’s Chief Executive Officer, the Company desires to provide the Executive certain assurances regarding severance pay and other benefits in the event of termination of employment under certain circumstances as described in this Agreement; and

WHEREAS, the Company and the Executive acknowledge and agree that the Company’s commitments in this Agreement serve as additional consideration for the Executive’s promises under the Confidentiality and Loyalty Agreement that the Executive has entered into with the Company (the “Loyalty Agreement”).

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows:

1. Not an Employment Agreement . This Agreement is not an employment agreement and shall not change the employment relationship between the Company and the Executive. Except as expressly provided herein, this Agreement shall not amend or alter the terms of, or limit the benefits to the Executive under, any existing or future employment, transition, change of control or other agreement between the Executive and the Company. This Agreement shall not be amended by any such future agreement unless such future agreement specifically provides that the terms of this Agreement shall be amended. Anything in this Agreement to the contrary notwithstanding and subject to any existing or future employment or other agreement between the Company and the Executive, (a) the Executive may terminate the Executive’s employment with the Company at any time and for any reason and (b) the Company may terminate the Executive’s employment with the Company at any time and for any reason.

2. Severance Benefits .

(a) Accrued Amounts . Upon the Executive’s termination of employment with the Company for any reason, the Company will pay or provide to the Executive his accrued but unpaid base salary through the date of such termination, plus all benefits as may be accrued and unpaid under any benefits arrangements of the Company. Whether the Executive forfeits vested equity compensation benefits will be determined in accordance with the terms of plans and agreements applicable to such equity compensation benefits rather than this Agreement.

(b) Termination Without Cause or For Good Reason . If the Executive’s employment with the Company is terminated by the Company without Cause or by the Executive for Good Reason, then in addition to the amounts described in subsection (a), and provided that the Executive timely signs a release of claims in the form attached hereto as Exhibit A (adjusted as necessary to conform to then-existing legal requirements in a manner reasonably acceptable to the Company and the Executive) (a “Full Release”) and does not revoke the Release as provided therein, the Company shall pay or provide to the Executive the following:

(i) The Company shall, subject to the provisions of Section 4, pay the Executive as severance pay the following cash amounts:

(A) A single sum on the 60th day following the date of the Executive’s Separation from Service (as that term is defined in the Executive’s Key Executive Employment and Severance Agreement) an amount equal to the product of two times the Annual Cash Compensation (as defined below); and

(B) If the Executive will not receive a bonus with respect to the fiscal year in which such termination occurs under the bonus plan then in effect solely as a result of the Executive’s termination, a pro rata bonus payment for the fiscal year in which the termination occurs in an amount equal to the bonus (if any) that the Executive would have received (based on achievement of actual performance goals, but determined without regard to any discretionary negative adjustments) had he remained employed through the entire fiscal year multiplied by a fraction representing the portion of the fiscal year through the termination date during which the Executive served the Company, payable at the same time that the bonus would have been paid had the Executive remained in employment; and

(ii) During the period ending on the earlier of (A) twenty-four (24) months following the date of the Executive’s Separation from Service or (B) the date the Executive becomes employed on a substantially full-time basis, the Company shall make available to the Executive coverage under the Company’s medical, dental and life insurance (but not short or long term disability) plans on the same terms as such plans are made available to the Company’s salaried employees generally; provided that any period of continued medical and dental coverage pursuant to this provision shall be credited against (reduce) the maximum period of continuation coverage that the Executive (or any other qualified beneficiary with respect to the Executive) is permitted to elect in accordance with COBRA or any successor provision thereto; and provided further that, if provision of any such health benefits would subject the Company or its benefits arrangements to a penalty or adverse tax treatment, then the Company shall provide a cash payment to Employee in an amount reasonably determined by the Company to be equivalent to the portion of the COBRA premiums that the Company would have paid for such benefits.

The term “Annual Cash Compensation” means the sum of (1) the product of the Executive’s average monthly base salary during the twelve (12) consecutive months immediately prior to the date of termination multiplied by twelve (12) (the “Base Salary Amount”), plus (2) the Executive’s target bonus with respect to the fiscal year in which termination occurs under the bonus plan then in effect.

In no event will any payment or benefit described herein be paid or provided earlier than the first date that the Company may make such payment or provide such benefit without causing an additional tax to be paid under Section 409A of the Internal Revenue Code and the regulations thereunder (“Section 409A”).

(iii) If the Executive is entitled to the severance described in Section 2(b)(i), then during the two-year period after the date of the Executive’s Separation from Service, for no additional consideration, the Executive will make himself available to consult with, otherwise assist or provide general advice to the then Chief Executive Officer of the Company and to the Board of Directors of the Company as they may reasonably request, consistent with the Executive's other commitments (which may include full-time employment), for a nominal amount of time in each instance. In no event shall the Executive be obligated to provide such services to an extent that would involve a material amount of his time in the aggregate. During such period and thereafter, the Executive will also cooperate fully with the Company in any investigation, negotiation, litigation or other action arising out of transactions or other matters in which he was involved or of which he had knowledge during his employment with the Company. In the event such a matter arises, the Company will pay the Executive a reasonable per diem amount for the time that he must devote to such cooperation, which the Company and the Executive will negotiate in good faith, and fully reimburse the Executive for any reasonable expenses incurred by him in the course of his cooperation.

(i) “Cause” means any of the following: (A) theft, dishonesty, fraudulent misconduct, unauthorized disclosure of trade secrets, gross dereliction of duty or other grave misconduct on the part of the Executive that is substantially injurious to the Company; (B) the Executive’s willful act or omission that he knew would have the effect of materially injuring the reputation, business or prospects of the Company; (C) the Executive’s conviction of a felony, as evidenced by a binding and final judgment, order or decree of a court of competent jurisdiction; (D) the Executive’s consent to an order of the Securities and Exchange Commission for the Executive’s violation of the federal securities laws; (E) the Executive’s repeated and demonstrated failure to perform material duties in a competent and efficient manner which failure is not due to illness or disability of the Executive; (F) a petition under the federal bankruptcy laws or any state insolvency law was filed by or against, or a receiver was appointed by a court for the property of, the Executive; (G) the Executive’s failure to file timely (including extensions) federal or state income tax returns that the Executive or his spouse is required by law to file (such as personal returns and returns for trusts or entities of which the Executive or his spouse is trustee, controlling or general partner or member, or managing member) and to pay related taxes; (H) the occurrence of improprieties involving the financial statements of the Company in which the Executive was directly or indirectly involved in committing the impropriety; (I) the Executive’s commission of any material violation of codes of conduct of the Company applicable to the Executive; or (J) the Executive’s material breach of his obligations under the Loyalty Agreement. Notwithstanding the foregoing, the Executive shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Executive (1) a copy of a resolution, duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board of Directors of the Company (excluding the Executive) at a meeting of the Board of Directors called and held for the purpose (after reasonable notice to the Executive and an opportunity for him, together with his counsel, to be heard before the Board of Directors), finding that in the good faith opinion of the Board of Directors conduct of the Executive met one of the standards set forth in any of clauses (A) through (J) of the preceding sentence and specifying the particulars thereof and (2) an affidavit sworn to by the Secretary of the Company stating that such resolution was in fact adopted by the affirmative vote of not less than a majority of the entire membership of the Board of Directors (excluding the Executive).

(ii) “Good Reason” means any (A) material reduction in the Executive’s base salary except if the Executive initiates or agrees to a general reduction of base salaries of executive officers of the Company and the Executive’s base salary is subject to reduction on the same basis and terms that apply to the other officers of the Company or, with the prior consent of the Executive, a reasonable larger percentage reduction in light of his position as the Company’s Chief Executive Officer, (B) material adverse change, without the Executive’s prior written consent, in the Executive’s working conditions or status with the Company, or (C) relocation, without the Executive’s prior written consent, of the Executive’s principal place of employment to a location more than 50 miles from the Executive’s principal place of employment on the date hereof; provided that Good Reason shall not be deemed to exist unless (1) the Executive provides written notice to the Chairman of the Board of Directors of the Company of the existence of the circumstance constituting Good Reason within 45 days after such circumstance first arises and (2) the Company fails to remedy such circumstance within 30 days after receipt of such notice. The Executive’s termination as a result of Good Reason shall automatically occur on the 31st day following the receipt by the Company of the written notice of termination from the Executive, unless the Company has cured the circumstance during the 30-day cure period. If the Company cures the circumstance during the 30-day cure period, then the Executive’s notice of Good Reason shall be deemed withdrawn.

3. Miscellaneous .

(a) Withholding . All payments under this Agreement shall be subject to withholding or deduction by reason of the Federal Insurance Contributions Act, the federal income tax and state or local income tax and similar laws, to the extent such laws apply to such payments.

(b) Severability . This Agreement is to be governed by and construed according to the laws of the State of Wisconsin, without reference to conflict of law principles thereof. If any provision of this Agreement shall

be held invalid and unenforceable for any reason whatsoever, such provision shall be deemed deleted and the remainder of the Agreement shall be valid and enforceable without such provision.

(c) Notices . All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by reputable overnight courier or registered or certified mail, return receipt requested, postage prepaid, addressed as follows: (i) if to the Executive, to his home address as it appears on the personnel records of the Company; and (ii) if to the Company, to the General Counsel of the Company at the Company’s principal executive offices, or, in each case, to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective when personally delivered, on the date of delivery by overnight courier or on the second business day following the day on which such item was mailed.

(d) Entire Agreement; Term and Amendments . This Agreement and the Loyalty Agreement contain the entire understanding between the Company and the Executive with respect to the subject matter hereof, except for the following additional agreements between the Company and the Executive:

(i) The Key Executive Employment and Severance Agreement (the “KEESA”); and

(ii) Any stock option, restricted stock or other award agreement under the Company’s stock and incentive plans.

Anything in this Agreement to the contrary notwithstanding, if there is a Change in Control of the Company (as defined in the KEESA) at a time that the KEESA is in effect, then the rights and obligations of the Company and the Executive in respect of the Executive’s employment shall be determined in accordance with the KEESA rather than under this Agreement. Nothing contained in this Agreement shall be deemed to supersede any of the obligations, agreements, provisions or covenants of the Company or the Executive contained in the KEESA. At the request of the Company prior to a Change in Control of the Company, the Executive will execute a revised form of the KEESA so long as such revised form is substantially the same as the form then in effect for other senior executives of the Company, including without limitation a revised form that reflects changes that the Company determines are appropriate to comply with regulations under Section 409A. This Agreement shall continue in effect until the date the Executive reaches “Normal Retirement Age” as defined in the Oshkosh Corporation Salaried and Clerical Employees Retirement Plan as in effect on the date hereof unless earlier terminated by mutual agreement of the parties hereto. This Agreement may be modified only in writing signed by the parties hereto.

(e) Successors . This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall (i) inure to the benefit of and be enforceable by the Executive’s legal representatives and (ii) inure to the benefit of and be binding upon the Company and its successors.

(f) Dispute Resolution . All controversies between the Executive and the Company arising under this Agreement shall be determined by arbitration. Any arbitration under this Section 3(f) shall be conducted in Appleton, Wisconsin, before the American Arbitration Association, and in accordance with the rules of such organization. The arbitration award may allocate attorneys’ fees and expenses attributable to the arbitration as determined by the arbitrator. The award of the arbitrators, or the majority of them, shall be final, and judgment upon the award rendered may be entered into any court, state or federal, having jurisdiction.

4. Limitations on Entitlements . Section 2 is subject to this Section 4. If the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason, then the Company shall satisfy its obligations under Section 2 only after the Executive has incurred a Separation from Service. The requirements of subsections (a) and (b) below shall apply to the payment or provision of compensation and benefits pursuant to Section 2:

(a) Six-Month Delay . Notwithstanding any contrary provision of this Agreement, to extent the Executive would otherwise be entitled to any severance pay described in Section 2, or other payment or benefit under

any plan or arrangement of the Company or its affiliates, that constitutes “deferred compensation” subject to Section 409A, and that if paid during the six months beginning on the Executive’s Separation from Service would be subject to additional tax under Section 409A because the Executive is a “specified employee” (within the meaning of Section 409A as determined by the Company), such payment or benefit shall not be made until the first day of the seventh month following the Separation from Service for reasons other than death (the “Authorized Payment Date”). The amount delayed for payment pursuant to this Section 4 shall be paid to the Executive on the Authorized Payment Date in a cash payment, accompanied by an interest payment calculated at the rate of interest announced by U.S. Bank, National Association, Milwaukee, Wisconsin, from time to time as its prime or base lending rate (“Prime”), determined on the date the Separation from Service occurred and compounded quarterly.

(b) Life Insurance Restriction . During the period beginning on the date of the Separation from Service and ending on the Authorized Payment Date, the Executive shall pay to the Company the cost of any life insurance coverage that provides a benefit in excess of $50,000 under a group term life insurance policy, unless the total cost of coverage during such period is less than the limit prescribed by Code Section 402(g) as in effect at the time of the Executive’s Separation from Service. On the Authorized Payment Date, the Company shall make a cash payment to the Executive, accompanied by an interest payment at Prime, determined on the date of the Separation from Service and compounded quarterly, equal to the aggregate amount paid by the Executive to the Company for such taxable life insurance coverage, and thereafter such coverage shall be provided as otherwise required by Section 2.

(c) Limitations on Reimbursements and In-Kind Benefits . Notwithstanding anything to the contrary in this Agreement or elsewhere, to the extent any expense reimbursement or the provision of any in-kind benefit under this Agreement is determined to be subject to Section 409A, the amount of any such expenses eligible for reimbursement, or the provision of any in-kind benefit, in one calendar year shall not affect the expenses eligible for reimbursement in any other calendar year (except for any life-time or other aggregate limitation applicable to medical expenses), in no event shall any expenses be reimbursed after the last day of the calendar year following the calendar year in which the Executive incurred such expenses, and in no event shall any right to reimbursement or the provision of any in-kind benefit be subject to liquidation or exchange for another benefit.

5. Compliance with Internal Revenue Code Section 409A . The Company and the Executive intend the terms of this Agreement to be in compliance with Section 409A. The Company does not guarantee the tax treatment or tax consequences associated with any payment or benefit, including but not limited to consequences related to Section 409A. To the maximum extent permissible, any ambiguous terms of this Agreement shall be interpreted in a manner which avoids a violation of Section 409A. The Executive acknowledges that to avoid an additional tax on payments that may be payable or benefits that may be provided under this Agreement and that constitute deferred compensation that is not exempt from Section 409A, the Executive must make a reasonable, good faith effort to collect any payment or benefit to which the Executive believes the Executive is entitled hereunder no later than 90 days after the latest date upon which the payment could have been made or benefit provided under this Agreement, and if the payment or benefit is not paid or provided, then the Executive must take further enforcement measures within 180 days after such latest date.

IN WITNESS WHEREOF, the parties have executed this Agreement the 25 ^th day of January, 2016 to be effective as of January 1, 2016.

OSHKOSH CORPORATION

By: /s/ Ignacio A. Cortina

Name: Ignacio A. Cortina

Title: Senior Vice President and Secretary

Attest: /s/ Lori R. Mackey

Name: Lori R. Mackey

Title: Assistant Secretary

EXECUTIVE

/s/ Wilson R. Jones

Wilson R. Jones

EXHIBIT A

RELEASE

1. In exchange for the promises and payments provided for in the Severance Agreement (the “Agreement”) effective as _______ ___, 201_ between Oshkosh Corporation, a Wisconsin corporation (the “Company”), and Wilson R. Jones (the “Executive”), the Executive hereby releases and forever discharges the Released Parties (defined below) from any and all claims, demands, rights, liabilities and causes of action of any kind or nature, known or unknown, arising prior to or through the date the Executive executes this Release, including, but not limited to, any claims, demands, rights, liabilities and causes of action arising or having arisen out of or in connection with the Executive’s employment or termination of employment with the Company. “Released Parties” includes the Company, its parent companies, subsidiaries, related and affiliated companies, and its and their past and present employees, directors, officers, agents, shareholders, insurers, attorneys, executors, assigns and other representatives of any kind. The Executive also releases and waives any claim or right to further compensation, benefits, damages, penalties, attorneys’ fees, costs or expenses of any kind from the Company or any of the other Released Parties except as provided in the Agreement. This release specifically includes, but is not limited to, a release of any and all claims pursuant to state and local fair employment law(s); Title VII of the Civil Rights Act of 1964; the Rehabilitation Act of 1973; the Reconstruction Era Civil Rights Acts, 42 U.S.C. §§1981-1988; the Civil Rights Act of 1991; the Age Discrimination in Employment Act (“ADEA”); the Americans with Disabilities Act; state and federal family and/or medical leave acts; state and federal wage payment laws to the extent such claims can legally be waived; and any other federal, state or local laws or regulations of any kind, whether statutory or decisional. This release also includes, but is not limited to, a release of any claims for wrongful termination, retaliation, tort, breach of contract, defamation, misrepresentation, violation of public policy or invasion of privacy. This release does not include a waiver of any claim that cannot legally be waived. This release does not apply to any right the Executive may have to indemnification by the Company by virtue of his status as a director, officer or employee of the Company under applicable law and/or the Company’s bylaws.

2. The Executive states that he has not filed or joined in any complaints, lawsuits, or proceedings of any kind against the Company or any of the other Released Parties, and the Executive promises never to file, pursue, participate in, or join in any lawsuits or proceedings asserting any claims that are released in this Release. However, nothing in this Release prevents the Executive from (a) challenging the enforceability of this Release under the ADEA; or (b) filing a charge with the EEOC or otherwise cooperating with the EEOC; however, this Release does prohibit the Executive from obtaining any personal or monetary relief from the Released Parties based upon such cooperation or charge, whether filed by the Executive or anyone else on behalf of the Executive.

3. The Executive agrees and understands that this Release does not supersede any confidentiality or noncompete agreements or obligations to which the Executive was subject while employed by the Company or reduce the Executive’s obligations to comply with applicable laws relating to trade secrets, confidential information or unfair competition.

4. The Executive hereby acknowledges that the benefits provided in the Agreement are greater than those to which the Executive is entitled by any contract, employment policy, or otherwise. The Executive has up to twenty-one (21) days to consider whether to accept this Release and the Executive enters into it voluntarily. The Executive may revoke this Release, in writing, within seven (7) days after signing it, and this Release will not become enforceable or effective until the revocation period has expired. The Company advises the Executive to consult with an attorney prior to signing this Release.

5. Neither the Company’s signing of this Release nor any actions taken by the Company toward compliance with the terms of this Release or the Agreement constitute an admission by the Company that it has acted improperly or unlawfully with regard to the Executive or that it has violated any state or federal law.

6. If any portion of this Release is found to be unenforceable, the parties desire that all other portions that can be separated from it, or appropriately limited in scope, shall remain fully valid and enforceable. The Executive enters into this Release knowingly and voluntarily and without any coercion.

AGREED TO AND ACCEPTED BY:

EXECUTIVE

[to be signed only after termination] ______ Date: [ to be signed only after termination ] _

Wilson R. Jones

Exhibit 10.2

KEY EXECUTIVE EMPLOYMENT AND SEVERANCE AGREEMENT

THIS AGREEMENT, made and entered into effective as of the 1st day of January, 2016, by and between Oshkosh Corporation, a Wisconsin corporation (hereinafter referred to as the “Company”), and Wilson R. Jones (hereinafter referred to as the “Executive”).

W I T N E S S E T H :

WHEREAS, the Executive is employed by the Company and/or a subsidiary of the Company in a key executive capacity, and the Executive’s services are valuable to the conduct of the business of the Company;

WHEREAS, the Board of Directors of the Company (the “Board”) recognizes that circumstances may arise in which a change in control of the Company occurs, through acquisition or otherwise, thereby causing uncertainty about the Executive’s future employment with the Company and/or any such subsidiary without regard to the Executive’s competence or past contributions, which uncertainty may result in the loss of valuable services of the Executive to the detriment of the Company and its shareholders, and the Company and the Executive wish to provide reasonable security to the Executive against changes in the Executive’s relationship with the Company in the event of any such change in control;

WHEREAS, the Company and the Executive are desirous that any proposal for a change in control or acquisition of the Company will be considered by the Executive objectively and with reference only to the best interests of the Company and its shareholders;

WHEREAS, the Executive will be in a better position to consider the Company’s best interests if the Executive is afforded reasonable security, as provided in this Agreement, against altered conditions of employment that could result from any such change in control or acquisition; and

WHEREAS, as a further basis for the Company to enter into this Agreement, the Executive has entered into a Confidentiality and Loyalty Agreement in favor of the Company (the “Confidentiality Agreement”).

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth, the parties hereto mutually covenant and agree as follows:

1. Definitions . The following terms are used in this Agreement as defined in Exhibit A :



409A Affiliate	Covered Termination	Prime
Act	Effective Date	Section 409A Indemnification
Accrued Benefits	Employer	Section 409A Tax
Affiliate and Associate	Good Reason	Separation from Service
Annual Cash Compensation	Indemnified Section 409A Violation	Termination Date
Cause	Normal Retirement Date	Termination of Employment
Change in Control	Notice of Termination
Code	Person

2. Termination or Cancellation Prior to the Effective Date . The Company and the Executive shall each retain the right to terminate the employment of the Executive at any time prior to the Effective Date. If the Executive’s employment is terminated prior to the Effective Date, then this Agreement shall be terminated and cancelled and of no further force or effect, and any and all rights and obligations of the parties hereunder shall cease. In addition, this Agreement shall terminate upon the Executive ceasing to be an officer of the Company and its Affiliates prior to a Change in Control unless the Executive can reasonably demonstrate that such change in status occurred under circumstances described in clause (iii)(B)(1) or (iii)(B)(2) of the definition of “Effective Date” in Exhibit A .

3. Employment Period . If the Executive is employed by the Employer on the Effective Date, then the Company will, or will cause the Employer to, continue thereafter to employ the Executive during the Employment Period (as hereinafter defined), and the Executive will remain in the employ of the Employer, in accordance with and subject to the terms and provisions of this Agreement. For purposes of this Agreement, the term “Employment Period” means a period (i) commencing on the Effective Date, and (ii) ending at 11:59 p.m. Oshkosh Time on the earlier of the third anniversary of such date or the Executive’s Normal Retirement Date.

4. Duties . During the Employment Period, the Executive shall, in the most significant capacities and positions held by the Executive at any time during the 180-day period preceding the Effective Date or in such other capacities and positions as may be agreed to by the Company and the Executive in writing, devote the Executive’s best efforts and all of the Executive’s business time, attention and skill to the business and affairs of the Employer, as such business and affairs now exist and as they may hereafter be conducted.

5. Compensation . During the Employment Period, the Executive shall be compensated as follows:

(a) The Executive shall receive, at reasonable intervals (but not less often than monthly) and in accordance with such standard policies as may be in effect immediately prior to the Effective Date, an annual base salary in cash equivalent of not less than twelve times the Executive’s highest monthly base salary for the twelve-month period immediately preceding the month in which the Effective Date occurs or, if higher, an annual base salary at the rate in effect immediately prior to the Effective Date (determined prior to any reduction for amounts deferred under Section 401(k) of the Code or otherwise, or deducted pursuant to a cafeteria plan or qualified transportation fringe benefit under Sections 125 and 132(f) of the Code), subject to upward adjustment as hereinafter provided in Section 6 (such salary amount as adjusted upward from time to time is hereafter referred to as the “Annual Base Salary”).

(b) The Executive shall receive perquisites at least equal in value to those provided for the Executive at any time during the 180-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to any executives of the Company and its Affiliates of comparable status and position to the Executive. The Executive shall be reimbursed, at such intervals and in accordance with such standard policies that are most favorable to the Executive that were in effect at any time during the 180-day period immediately preceding the Effective Date or, if more favorable to the Executive, those provided generally at any time after the Effective Date to any executives of the Company and its Affiliates of comparable

status and position to the Executive, for any and all monies advanced in connection with the Executive’s employment for reasonable and necessary expenses incurred by the Executive on behalf of the Company, including travel expenses.

(c) The Executive and/or the Executive’s family, as the case may be, shall be included, to the extent eligible thereunder (which eligibility shall not be conditioned on the Executive’s salary grade or on any other requirement that excludes executives of the Company and its Affiliates of comparable status and position to the Executive unless such exclusion was in effect for such plan or an equivalent plan on the date 180 days prior to the Effective Date), in any and all welfare benefit plans, practices, policies and programs providing benefits for the Company’s salaried employees in general or, if more favorable to the Executive, to any executives of the Company and its Affiliates of comparable status and position to the Executive, including but not limited to group life insurance, hospitalization, medical and dental plans; provided , that , (i) in no event shall the aggregate level of benefits under such plans, practices, policies and programs in which the Executive is included be less than the aggregate level of benefits under plans, practices, policies and programs of the type referred to in this Section 5(c) in which the Executive was participating at any time during the 180-day period immediately preceding the Effective Date and (ii) in no event shall the aggregate level of benefits under such plans, practices, policies and programs be less than the aggregate level of benefits under plans, practices, policies and programs of the type referred to in this Section 5(c) provided at any time after the Effective Date to any executive of the Company and its Affiliates of comparable status and position to the Executive.

(d) The Executive shall annually be entitled to not less than the amount of paid vacation and not fewer than the number of paid holidays to which the Executive was entitled annually at any time during the 180-day period immediately preceding the Effective Date or such greater amount of paid vacation and number of paid holidays as may be made available annually to the Executive or any other executive of the Company and its Affiliates of comparable status and position to the Executive at any time after the Effective Date.

(e) The Executive shall be included in all plans providing additional benefits to any executives of the Company and its Affiliates of comparable status and position to the Executive, including but not limited to deferred compensation, retirement, stock option, stock appreciation, stock bonus and similar or comparable plans; provided , that , (i) in no event shall the aggregate level of benefits under such plans be less than the aggregate level of benefits under plans of the type referred to in this Section 5(e) in which the Executive was participating at any time during the 180-day period immediately preceding the Effective Date; (ii) in no event shall the aggregate level of benefits under such plans be less than the aggregate level of benefits under plans of the type referred to in this Section 5(e) provided at any time after the Effective Date to the Executive or any executive of the Company and its Affiliates of comparable status and position to the Executive; and (iii) the Company’s obligation to include the Executive in bonus or incentive compensation plans shall be determined by Section 5(f) .

(f) To assure that the Executive will have an opportunity to earn incentive compensation after the Effective Date, the Executive shall be included in a bonus plan of the Company that shall satisfy the standards described below (the “Bonus Plan”). Bonuses under the Bonus Plan shall be payable with respect to achieving such financial or other goals reasonably related to the business of the Company, including the Employer, as the Company shall establish (the “Goals”), all of which Goals shall be attainable, prior to the end of the Employment Period, with approximately the same degree of probability as the goals under the Company’s bonus plan or plans in the form most favorable to the Executive that was in effect at any time during the 180-day period prior to the Effective Date (the “Existing Plan”) and in view of the Company’s existing and projected financial and business circumstances applicable at the time. The amount of the bonus (the “Bonus Amount”) that the Executive is eligible to earn under the Bonus Plan shall be no less than the amount of the Executive’s highest maximum potential award under the Existing Plan at any time during the 180‑day period prior to the Effective Date or, if higher, any maximum potential award under the Bonus Plan or any other bonus or incentive compensation plan in effect after the Effective Date for the Executive or for any executive of the Company and its Affiliates of comparable status and position to the Executive (such bonus amount herein referred to as the “Maximum Bonus”), and if the Goals are not achieved (and, therefore, the entire Maximum Bonus is not payable), then the Bonus Plan shall provide for a payment of a Bonus Amount not less than a portion of the Maximum Bonus reasonably related to that portion of the Goals that were achieved. Payment of the Bonus Amount (i) shall be in cash, unless otherwise agreed by the Executive, and (ii) shall not be affected by any

circumstance occurring subsequent to the end of the Employment Period, including termination of the Executive’s employment.

6. Annual Compensation Adjustments . During the Employment Period, the Board of Directors of the Company (or an appropriate committee thereof) will consider and appraise, at least annually, the contributions of the Executive to the Company, and in accordance with the Company’s practice prior to the Effective Date, due consideration shall be given, at least annually, to the upward adjustment of the Executive’s Annual Base Salary (i) commensurate with increases generally given to other executives of the Company and its Affiliates of comparable status and position to the Executive, and (ii) as the scope of the Company’s operations or the Executive’s duties expand.

7. Termination During Employment Period .

(a) Right to Terminate . During the Employment Period, (i) the Company shall be entitled to terminate the Executive’s employment (A) for Cause, (B) by reason of the Executive’s disability pursuant to Section 11 , or (C) for any other reason, and (ii) the Executive shall be entitled to terminate the Executive’s employment for any reason. Any such termination shall be subject to the procedures set forth in Section 12 and shall be subject to any consequences of such termination set forth in this Agreement. Any termination of the Executive’s employment during the Employment Period by the Employer shall be deemed a termination by the Company for purposes of this Agreement.

(b) Termination for Cause or Without Good Reason . If there is a Covered Termination for Cause or due to the Executive’s voluntarily terminating the Executive’s employment other than for Good Reason, then the Executive shall be entitled to receive only Accrued Benefits.

(c) Termination Giving Rise to a Termination Payment . If there is a Covered Termination by the Executive for Good Reason, or by the Company other than by reason of (i) death, (ii) disability pursuant to Section 11 , or (iii) Cause, and provided that the Executive timely signs, in accordance with Section 8(a)(ii) , a full release of claims in form and substance reasonably acceptable to the Company, then the Executive shall be entitled to receive, and the Company shall promptly pay, Accrued Benefits and, in lieu of further base salary for periods following the Termination Date, as liquidated damages and severance pay and in consideration of the covenants of the Executive set forth in the Confidentiality Agreement, the Termination Payment pursuant to Section 8(a) .

8. Payments Upon Termination .

(a) Termination Payment .

(i) The “Termination Payment” shall be an amount equal to the Annual Cash Compensation multiplied by the number of years or fractional portion thereof remaining in the Employment Period determined as of the Termination Date, except that the Termination Payment shall not be less than the amount of the Annual Cash Compensation. Subject to Section 8(a)(ii) , the Termination Payment shall be paid to the Executive in cash equivalent on the first day of the seventh month following the month in which the Executive’s Separation from Service occurs (the “Termination Payment Date”) and shall be accompanied by an interest payment calculated at Prime, such rate to be determined on the Termination Date, compounded quarterly. Such lump sum payment shall not be reduced by any present value or similar factor, and the Executive shall not be required to mitigate the amount of the Termination Payment by securing other employment or otherwise, nor will such Termination Payment be reduced by reason of the Executive securing other employment or for any other reason. The Termination Payment shall be in lieu of any other severance payments to which the Executive is entitled under the severance policies and practices of the Company and/or any subsidiary of the Company.

(ii) It is a condition of payment of the Termination Payment that the Executive deliver a full release to the Company no earlier than thirty (30) days and no later than eight (8) days prior to the Termination Payment Date. If the Executive does not timely deliver a full release to the

Company, or if the Executive delivers such a release but revokes it prior to the Termination Payment Date (to the extent he is able to do so), then the Executive shall not be entitled to the Termination Payment.

(b) Certain Code Consequences .

(i) Notwithstanding any other provision of this Agreement, if any portion of the Termination Payment or any other payment under this Agreement (including any Section 409A Indemnification under Section 8(b)(vi) ), or under any other agreement with or plan of the Company or the Employer, including, without limitation, the Oshkosh Corporation 2004 Incentive Stock and Awards Plan, the Oshkosh Corporation 2009 Incentive Stock and Awards Plan and any subsequently adopted equity incentive plan (the “Incentive Stock Plans”) or any stock option agreement (the “Stock Option Agreements”) between the Company and the Executive entered into pursuant to an Incentive Stock Plan (in the aggregate “Total Payments”), would constitute an “excess parachute payment,” then the Total Payments to be made to the Executive shall be either (A) delivered in full or (B) delivered in an amount such that the value of the aggregate Total Payments that the Executive is entitled to receive shall be One Dollar ($1.00) less than the maximum amount that the Executive may receive without becoming subject to the tax imposed by Section 4999 of the Code (or any successor provision) (the “Excise Tax”), whichever of the foregoing results in the receipt by the Executive of the greatest benefit on an after-tax basis (taking into account the applicable federal, state and local income taxes, including any Section 409A Tax, and the Excise Tax). If the provisions of Sections 280G and 4999 (or any successor provisions) are repealed without succession, then this Section 8(b)(i) shall be of no further force and effect.

(ii) For purposes of this Agreement, the terms “excess parachute payment” and “parachute payments” shall have the meanings assigned to them in Section 280G of the Code (or any successor provision) and such “parachute payments” shall be valued as provided therein. Present value for purposes of this Agreement shall be calculated in accordance with Section 1274(b)(2) of the Code (or any successor provision). Within 40 days following a Covered Termination or notice by one party to the other of its belief that there is a payment or benefit due the Executive that will result in an “excess parachute payment”, the Executive and the Company, at the Company’s expense, shall obtain the opinion (which need not be unqualified) of nationally recognized tax counsel (the “National Tax Counsel”) selected by the Company’s independent auditors and acceptable to the Executive in the Executive’s sole discretion (which may be regular outside counsel to the Company), which opinion sets forth (A) the amount of the Base Period Income, (B) the amount and present value of Total Payments, (C) the amount and present value of any excess parachute payments, and (D) the net after-tax proceeds to the Executive, taking into account the tax imposed under Code Section 4999, if (x) the Total Payments were delivered in accordance with clause (A) of Section 8(b)(i) or (y) the Total Payments were delivered in accordance with clause (B) of Section 8(b)(i). As used in this Section 8(b)(ii) , the term “Base Period Income” means an amount equal to the Executive’s “annualized includible compensation for the base period” as defined in Section 280G(d)(1) of the Code (or any successor provision). For purposes of such opinion, (x) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Company’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code (or any successor provisions), which determination shall be evidenced in a certificate of such auditors addressed to the Company and the Executive, and (y) the Executive shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation, and state and local income taxes at the highest marginal rate of taxation in the state or locality of Executive’s domicile (in both cases determined in the calendar year in which the Covered Termination occurs or notice described above is given, whichever is earlier), net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes. The opinion of the National Tax Counsel shall be dated as of the Termination Date and addressed to the Company and the Executive and shall be binding upon the Company and the Executive.

(iii) If such opinion determines that the Total Payments should be delivered in accordance with clause (B) of Section 8(b)(i), then the Total Payments shall be reduced or eliminated as specified by the Executive in writing delivered to the Company within 30 days of the Executive’s receipt of such opinion so that under the bases of calculations set forth in such opinion no portion of such Total Payments would be subject to the Excise Tax; provided that if Executive’s exercise of the right to specify the payments or benefits to be reduced or eliminated would result in additional tax being due under Section 409A of the Code or, if the Executive fails to so notify the Company, then the payments or benefits included in the Total Payments shall be reduced or eliminated so that under the bases of calculations set forth in such opinion no portion of such Total Payments would be subject to the Excise Tax by applying the following principles, in order: (x) the payment or benefit with the higher ratio of the parachute payment value to present economic value (determined using reasonable actuarial assumptions) shall be reduced or eliminated before a payment or benefit with a lower ratio; (y) the payment or benefit with the later possible payment date shall be reduced or eliminated before a payment or benefit with an earlier payment date; and (z) cash payments shall be reduced prior to non-cash benefits; provided further that if the foregoing order of reduction or elimination would result in additional tax being due under Section 409A of the Code, then the reduction shall be made pro rata among the payments or benefits included in the Total Payments (on the basis of the relative present value of the parachute payments). If the National Tax Counsel so requests in connection with the opinion required by this Section 8(b) , the Executive and the Company shall obtain, at the Company’s expense, and the National Tax Counsel may rely on, in providing the opinion, the advice of a firm of recognized executive compensation consultants as to the reasonableness of any item of compensation to be received by the Executive solely with respect to its status under Section 280G of the Code (or any successor provision) and the regulations thereunder. Notwithstanding the foregoing, the provisions of this Section 8(b) , including the calculations, notices and opinions provided for herein, shall be based upon the conclusive presumption that the following are reasonable: (1) the compensation and benefits provided for in Section 5 and (2) any other compensation, including but not limited to the Accrued Benefits, earned prior to the Termination Date by the Executive pursuant to the Company’s compensation programs if such payments would have been made in the future in any event, even though the timing of such payment is triggered by the Change in Control or the Termination Date.

(iv) In the event that, upon any audit by the Internal Revenue Service, or by a state or local taxing authority, of the Total Payments, it is finally determined that the Executive owes more Excise Tax than was contemplated in the opinion of the National Tax Counsel with respect to the amount of Total Payments delivered to the Executive, then the Executive and the Company, at the Company’s expense, shall direct the National Tax Counsel to re-issue its opinion taking into account the audit findings. Thereafter, appropriate adjustments shall be made under this Agreement, in the manner determined by the National Tax Counsel, such that the net amount that is payable to the Executive reflects the intent of the parties as expressed in this Section 8(b) . If the Company is required to make a payment to the Executive, then such payment shall be paid following the date of the final determination by a court or the Internal Revenue Service and within 30 days after the date the Executive provides the Company a written request for reimbursement thereof (accompanied by proof of taxes paid), but in no event shall the reimbursement be made later than the end of the calendar year following the year in which the Executive remits the excise tax to the Internal Revenue Service.

(v) The Company will bear all costs associated with the National Tax Counsel and will indemnify and hold harmless the National Tax Counsel of and from any and all claims, damages, and expenses resulting from or relating to the National Tax Counsel’s determinations pursuant to this Section 8(b) , except for claims, damages or expenses resulting from the gross negligence or willful misconduct of such firm.

(vi) The Company shall pay the Executive any Section 409A Indemnification within 30 days after the later of the date on which the Executive provides the Company with a written request for reimbursement thereof (accompanied by proof of payment of the Section 409A Tax upon

which such request is based) or the date that is the first day of the seventh month following the month in which the Separation from Service occurs, but in no event later than the end of the calendar year following the year in which the Executive remits the Section 409A Tax to the Internal Revenue Service. The Company and the Executive shall reasonably cooperate with each other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for Section 409A Tax, and the Executive shall, if reasonably requested by the Company, contest any obligation to pay a Section 409A Tax. If, as a result thereof, the Executive receives a tax refund or credit for any Section 409A Tax previously paid, the Executive shall return to the Company an amount equal to such refund or credit. Notwithstanding the above, no Section 409A Indemnification will be made if the Executive fails to timely consent to any amendment of this Agreement reasonably proposed by the Company for the purpose of avoiding the need to pay the Section 409A Tax.

(c) Additional Benefits . If there is a Covered Termination and the Executive is entitled to Accrued Benefits and the Termination Payment, then the Executive shall be entitled to the following additional benefits:

(i) Until the earlier of the end of the Employment Period or such time as the Executive has obtained new employment and is covered by benefits that in the aggregate are at least equal in value to the following benefits, the Executive shall continue to be covered, at the expense of the Company, by the most favorable life insurance, hospitalization, medical and dental coverage and other welfare benefits provided to the Executive and the Executive’s family during the 180-day period immediately preceding the Effective Date or at any time thereafter or, if more favorable to the Executive, coverage as was required hereunder with respect to the Executive immediately prior to the date Notice of Termination is given, subject to the following:

(A)

If applicable, following the end of the COBRA continuation period, if such hospitalization, medical or dental coverage is provided under a health plan that is subject to Section 105(h) of the Code, benefits payable under such health plan shall comply with the requirements of Treasury regulation section 1.409A-3(i)(1)(iv)(A) and (B) and, if necessary, the Company shall amend such health plan to comply therewith.

(B)

During the first six months following the Executive’s Separation from Service, the Executive shall pay the Company the cost of any life insurance coverage for the Executive that provides a benefit in excess of $50,000 under a group term life insurance policy. After the end of such six month period, the Company shall make a cash payment to the Executive (with interest at Prime, compounded quarterly) equal to the aggregate premiums paid by the Executive for such coverage, and thereafter such coverage shall be provided at the expense of the Company for the remainder of the period.

If the Executive is entitled to the Termination Payment pursuant to Section 12(b), then on the first anniversary of the Change in Control, the Company shall reimburse the Executive for any COBRA premiums the Executive paid for his or her hospitalization, medical and dental coverage under COBRA from the Executive’s Termination Date through such first anniversary of the Change in Control.

(ii) The Executive shall receive, until the end of the second calendar year following the calendar year in which the Separation from Service occurs, at the expense of the Company, outplacement services, on an individualized basis at a level of service commensurate with the Executive’s most senior status with the Company during the 180‑day period prior to the Effective Date (or, if higher, at any time after the Effective Date), provided by a nationally recognized executive placement firm selected by the Company with the consent of the Executive, which consent will not

be unreasonably withheld; provided that the cost to the Company of such services shall not exceed 15 percent of the Annual Base Salary.

(iii) The Company shall bear up to $5,000 in the aggregate of fees and expenses of consultants and/or legal or accounting advisors (other than the National Tax Counsel) engaged by the Executive to advise the Executive as to matters relating to the computation of benefits due and payable under this Section 8 .

(d) Rabbi Trust . Prior to or simultaneously with a Change in Control over which the Company has control or within three business days of any other Change in Control, the Company shall establish an irrevocable grantor trust (also known as a “rabbi trust”) for the benefit of the Executive and other executives of the Company who are parties to agreements with the Company similar to this Agreement for the sole purpose of (i) holding assets equal in value to the present value at any time after a Change in Control of the maximum amount of benefits to which the Executive may be entitled under Section 8(a) and Section 8(b) and to which such other executives may be entitled under similar provisions of their respective agreements and (ii) distributing such assets as their payment becomes due. Prior to or simultaneously with a Change in Control over which the Company has control or within three business days of any other Change in Control, the Company shall fund such trust with cash or marketable securities having the value described in clause (i); provided that the Company shall not be obligated to fund such trust at such time if the funding would result in additional tax being owed under Section 409A of the Code, and in such event, the Company shall fund such trust on the first date it may fund such trust without causing any such additional tax to be owed. The Company shall reasonably calculate the value described in clause (i) assuming that the date on which such calculation is made is the Termination Date applicable to the Executive and the corresponding date applicable to such other executives.

9. Death .

(a) Except as provided in Section 9(b) , in the event of a Covered Termination due to the Executive’s death, the Executive’s estate, heirs and beneficiaries shall receive all the Executive’s Accrued Benefits through the Termination Date.

(b) If the Executive dies after a Notice of Termination is given (i) by the Company or (ii) by the Executive for Good Reason, then the Executive’s estate, heirs and beneficiaries shall be entitled to the benefits described in Section 9(a) and, subject to the provisions of this Agreement (including Section 9(c) ), to such Termination Payment to which the Executive would have been entitled had the Executive lived, except that the Termination Payment shall be paid on the 120 ^th day following the date of the Executive’s death (the “Death Benefit Payment Date”), without interest thereon. For purposes of this Section 9(b) , the Termination Date shall be the earlier of 30 days following the giving of the Notice of Termination, subject to extension pursuant to the definition of Termination of Employment, or one day prior to the end of the Employment Period.

(c) It is a condition of payment of the Termination Payment under Section 9(b) that the Executive’s estate deliver a full release of claims in form and substance reasonably acceptable to the Company no earlier than sixty (60) days and no later than eight (8) days prior to the Death Benefit Payment Date. If the Executive’s estate does not timely deliver a full release to the Company, or if the Executive’s estate delivers such a release but revokes it prior to the Termination Payment Date (to the extent the Executive’s estate is able to do so), then the Executive’s estate shall not be entitled to the Termination Payment.

10. Retirement . If, during the Employment Period, the Executive and the Company shall execute an agreement providing for the early retirement of the Executive from the Company, or the Executive shall otherwise give notice that the Executive is voluntarily choosing to retire early from the Company, then the Executive shall receive Accrued Benefits through the Termination Date; provided , that if the Executive’s employment is terminated by the Executive for Good Reason or by the Company other than by reason of death, disability or Cause and the Executive also, in connection with such termination, elects voluntary early retirement, then the Executive shall also be entitled to receive a Termination Payment pursuant to Section 8(a) .

11. Termination for Disability . If, during the Employment Period, as a result of the Executive’s disability due to physical or mental illness or injury (regardless of whether such illness or injury is job‑related), the Executive shall have been absent from the Executive’s duties hereunder on a full‑time basis for a period of six consecutive months and, within thirty days after the Company notifies the Executive in writing that it intends to terminate the Executive’s employment (which notice shall not constitute the Notice of Termination contemplated below), the Executive shall not have returned to the performance of the Executive’s duties hereunder on a full‑time basis, then the Company may terminate the Executive’s employment for purposes of this Agreement pursuant to a Notice of Termination. If the Executive’s employment is terminated on account of the Executive’s disability in accordance with this Section 11 , then the Executive shall receive Accrued Benefits and shall remain eligible for all benefits provided by any long term disability programs of the Company in effect at the time the Company sends notice to the Executive of its intent to terminate pursuant to this Section.

12. Termination Notice and Procedure .

(a) Any termination of the Executive’s employment during the Employment Period by the Company or the Executive (other than a termination of the Executive’s employment referenced in the second sentence of the definition of “Effective Date” in Exhibit A ) shall be communicated by written Notice of Termination to the Executive, if such Notice is given by the Company, and to the Company, if such Notice is given by the Executive, all in accordance with the following procedures and those set forth in Section 23 :

(i) If such termination is for disability, Cause or Good Reason, then the Notice of Termination shall indicate in reasonable detail the facts and circumstances alleged to provide a basis for such termination.

(ii) Any Notice of Termination by the Company shall have been approved, prior to the giving thereof to the Executive, by a resolution duly adopted by a majority of the directors of the Company (or any successor corporation) then in office, a copy of which shall accompany the Notice.

(iii) If the Notice is given by the Executive for Good Reason, then the Executive may cease performing the Executive’s duties hereunder on or after the date 15 days after the delivery of Notice of Termination (unless the Notice of Termination is based upon clause (vii) of the definition of “Good Reason” in Exhibit A , in which case the Executive may cease performing his duties at the time the Executive’s employment is terminated) and shall in any event cease employment on the Termination Date, if any, arising from the delivery of such Notice. If the Notice is given by the Company, then the Executive may cease performing the Executive’s duties hereunder on the date of receipt of the Notice of Termination, subject to the Executive’s rights hereunder.

(iv) The recipient of any Notice of Termination shall personally deliver or mail in accordance with Section 23 written notice of any dispute relating to such Notice of Termination to the party giving such Notice within fifteen days after receipt thereof. After the expiration of such fifteen days, the contents of the Notice of Termination shall become final and not subject to dispute.

Notwithstanding the foregoing, (A) if the Executive terminates the Executive’s employment after a Change in Control without complying with this Section 12 , then the Executive will be deemed to have voluntarily terminated the Executive’s employment other than for Good Reason and deemed to have delivered a written Notice of Termination to that effect to the Company as of the date of such termination and (B) if the Company or the Employer terminates the Executive’s employment after a Change in Control without complying with this Section 12 , then the Company will be deemed to have terminated the Executive’s employment other than by reason of death, disability or Cause and the Company will be deemed to have delivered a written Notice of Termination to that effect to the Executive as of the date of such termination. Under circumstances described in clause (B) above, the Executive may, but shall not be obligated to, also deliver a Notice of Termination based upon clause (vii) of the definition of “Good Reason” in Exhibit A for the purpose of subjecting such Notice to Section 12(a)(iv) .

(b) If a Change in Control occurs and the Executive’s employment with the Employer terminates (whether by the Company, the Executive or otherwise) within 180 days prior to the Change in Control, then the Executive may assert that such termination is a Covered Termination by sending a written Notice of Termination to the Company at any time prior to the day 180 days following the Change in Control in accordance with the procedures set forth in this Section 12(b) and those set forth in Section 23 . If the Executive asserts that the Executive terminated the Executive’s employment for Good Reason or that the Company terminated the Executive’s employment other than for disability or Cause, then the Notice of Termination shall indicate in reasonable detail the facts and circumstances alleged to provide a basis for such assertions. The Company shall personally deliver or mail in accordance with Section 23 written notice of any dispute relating to such Notice of Termination to the Executive within 15 days after receipt thereof. After the expiration of such 15 days, the contents of the Notice of Termination shall become final and not subject to dispute. If the Executive’s termination constitutes a Covered Termination under this Section 12(b) such that the Executive is entitled to receive the Termination Payment, then such Termination Payment shall be paid to the Executive in cash equivalent on the first anniversary of the Change in Control and shall be accompanied by an interest payment calculated at Prime, such rate to be determined on the date of the Change in Control, compounded quarterly, from the date of the Change in Control. In addition, for purposes of applying the provisions of Section 8(a)(ii) , the first anniversary of the Change in Control shall be considered the Termination Payment Date.

13. Confidentiality Agreement . The obligations of the Executive under the Confidentiality Agreement shall remain in force after the Effective Date.

14. Expenses and Interest . If, after the Effective Date, (i) a dispute arises with respect to the enforcement of the Executive’s rights under this Agreement or (ii) any legal or arbitration proceeding shall be brought to enforce or interpret any provision contained herein or in the Confidentiality Agreement or to recover damages for breach hereof or of the Confidentiality Agreement, in either case so long as the Executive is not acting in bad faith, then the Company shall reimburse the Executive for any reasonable attorneys’ fees and necessary costs and disbursements incurred as a result of such dispute, legal or arbitration proceeding or tax audit or proceeding (“Expenses”), and prejudgment interest on any money judgment or arbitration award obtained by the Executive calculated at Prime from the date that payments to the Executive should have been made under this Agreement. Within ten days after the Executive’s written request therefor (but in no event later than the end of the calendar year following the calendar year in which such Expense is incurred), the Company shall reimburse the Executive, or such other person or entity as the Executive may designate in writing to the Company, the Executive’s reasonable Expenses accompanied by an interest payment at Prime, compounded quarterly.

15. Payment Obligations Absolute . The Company’s obligation during and after the Employment Period to pay the Executive the amounts and to make the benefit and other arrangements provided herein shall be absolute and unconditional and shall not be affected by any circumstances, including, without limitation, any setoff, counterclaim, recoupment, defense or other right that the Company may have against the Executive or anyone else. Except as provided in Section 8(b) and Section 14 , all amounts payable by the Company hereunder shall be paid without notice or demand. Each and every payment made hereunder by the Company shall be final, and the Company will not seek to recover all or any part of such payment from the Executive, or from whomsoever may be entitled thereto, for any reason whatsoever.

16. Successors .

(a) If the Company sells, assigns or transfers all or substantially all of its business and assets to any Person or if the Company merges into or consolidates or otherwise combines (where the Company does not survive such combination) with any Person (any such event, a “Sale of Business”), then the Company shall assign all of its right, title and interest in this Agreement as of the date of such event to such Person, and the Company shall cause such Person, by written agreement in form and substance reasonably satisfactory to the Executive, to expressly assume and agree to perform from and after the date of such assignment all of the terms, conditions and provisions imposed by this Agreement upon the Company. Failure of the Company to obtain such agreement prior to the effective date of such Sale of Business shall be a breach of this Agreement constituting “Good Reason” hereunder, except that for purposes of implementing the foregoing, the date upon which such Sale of Business becomes effective shall be

deemed the Termination Date. In case of such assignment by the Company and of assumption and agreement by such Person, as used in this Agreement, “Company” shall thereafter mean such Person that executes and delivers the agreement provided for in this Section 16 or that otherwise becomes bound by all the terms and provisions of this Agreement by operation of law, and this Agreement shall inure to the benefit of, and be enforceable by, such Person. The Executive shall, in the Executive’s discretion, be entitled to proceed against any or all of such Persons, any Person that theretofore was such a successor to the Company (as defined in the first paragraph of this Agreement) and the Company (as so defined) in any action to enforce any rights of the Executive hereunder. Except as provided in this Section 16(a) , this Agreement shall not be assignable by the Company. This Agreement shall not be terminated by the voluntary or involuntary dissolution of the Company.

(b) This Agreement and all rights of the Executive shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, heirs and beneficiaries. All amounts payable to the Executive under Sections 7, 8, 9, 10, 11 and 14 if the Executive had lived shall be paid, in the event of the Executive’s death, to the Executive’s estate, heirs and representatives; provided , however , that the foregoing shall not be construed to modify any terms of any benefit plan of the Company, as such terms are in effect on the Effective Date, that expressly govern benefits under such plan in the event of the Executive’s death.

17. Severability . The provisions of this Agreement shall be regarded as divisible, and if any of said provisions or any part hereof are declared invalid or unenforceable by a court of competent jurisdiction, then the validity and enforceability of the remainder of such provisions or parts hereof and the applicability thereof shall not be affected thereby.

18. Amendment . This Agreement may not be amended or modified at any time except by written instrument executed by the Company and the Executive. However, at the request of the Company, the Executive will execute a revised form of this Agreement that reflects changes that the Company determines are appropriate to comply with regulations under Code Section 409A.

19. Withholding . The Company shall be entitled to withhold from amounts to be paid to the Executive hereunder any federal, state or local withholding or other taxes or charges which it is from time to time required to withhold; provided , that the amount so withheld shall not exceed the minimum amount required to be withheld by law. In addition, if prior to the date of payment of the Termination Payment hereunder, the Federal Insurance Contributions Act (FICA) tax imposed under Sections 3101, 3121(a) and 3121(v)(2), where applicable, becomes due with respect to any payment or benefit to be provided hereunder, then the Company shall provide for an immediate payment of the amount needed to pay the Executive’s portion of such tax (plus an amount equal to the taxes that will be due on such amount) and the Executive’s Termination Payment shall be reduced accordingly. The Company shall be entitled to rely on an opinion of the National Tax Counsel if any question as to the amount or requirement of any such withholding shall arise.

20. Additional Section 409A Provisions .

(a) If any payment amount or the value of any benefit under this Agreement is required to be included in the Executive’s income prior to the date such amount is actually paid or the benefit provided as a result of the failure of this Agreement (or any other arrangement that is required to be aggregated with this Agreement under Code Section 409A) to comply with Code Section 409A, then the Company shall make a payment to the Executive, in a lump sum, within 90 days after the date it is finally determined that the Agreement (or such other arrangement that is required to be aggregated with this Agreement) fails to meet the requirements of Section 409A of the Code; such payment shall equal the amount required to be included in the Executive’s income as a result of such failure and shall reduce the amount of payments or benefits otherwise due hereunder (other than additional payments to be made by the Company pursuant to Section 8(b)).

(b) The Company and the Executive intend the terms of this Agreement to be in compliance with Section 409A of the Code. To the maximum extent permissible, any ambiguous terms of this Agreement shall be interpreted in a manner which avoids a violation of Section 409A of the Code.

(c) The Executive acknowledges that to avoid an additional tax on payments that may be payable or benefits that may be provided under this Agreement and that constitute deferred compensation that is not exempt from Section 409A of the Code, the Executive must make a reasonable, good faith effort to collect any payment or benefit to which the Executive believes the Executive is entitled hereunder no later than 90 days after the latest date upon which the payment could have been made or benefit provided under this Agreement, and if the payment or benefit is not paid or provided, then the Executive must take further enforcement measures within 180 days after such latest date.

21. Certain Rules of Construction . No party shall be considered as being responsible for the drafting of this Agreement for the purpose of applying any rule construing ambiguities against the drafter or otherwise. No draft of this Agreement shall be taken into account in construing this Agreement. Any provision of this Agreement that requires an agreement in writing shall be deemed to require that the writing in question be signed by the Executive and an authorized representative of the Company. This Agreement supersedes any prior Key Executive Employment and Severance Agreement between the Executive and the Company.

22. Governing Law; Resolution of Disputes .

(a) This Agreement and the rights and obligations hereunder shall be governed by and construed in accordance with the internal laws of the State of Wisconsin (excluding any choice of law rules that may direct the application of the laws of another jurisdiction) except that Section 22(b) shall be construed in accordance with the Federal Arbitration Act if arbitration is chosen by the Executive as the method of dispute resolution.

(b) Any dispute arising out of this Agreement or, after the Effective Date, the Confidentiality Agreement, shall, at the Executive’s election, be determined by arbitration under the rules of the American Arbitration Association then in effect (but subject to any evidentiary standards set forth in this Agreement), in which case both parties shall be bound by the arbitration award, or by litigation. Whether the dispute is to be settled by arbitration or litigation, the venue for the arbitration or litigation shall be Oshkosh, Wisconsin or, at the Executive’s election, if the Executive is no longer residing or working in the Oshkosh, Wisconsin, in the judicial district encompassing the city in which the Executive resides; provided , that , if the Executive is not then residing in the United States, then the election of the Executive with respect to such venue shall be either Oshkosh, Wisconsin or in the judicial district encompassing that city in the United States among the thirty cities having the largest population (as determined by the most recent United States Census data available at the Termination Date) that is closest to the Executive’s residence. The parties consent to personal jurisdiction in each trial court in the selected venue having subject matter jurisdiction notwithstanding their residence or situs, and each party irrevocably consents to service of process in the manner provided hereunder for the giving of notices

23. Notice . Notices given pursuant to this Agreement shall be in writing and, except as otherwise provided by Section 12(a)(iii) , shall be deemed given when actually received by the Executive or actually received by the Company’s Secretary or any officer of the Company other than the Executive. If mailed, such notices shall be mailed by United States registered or certified mail, return receipt requested, addressee only, postage prepaid, if to the Company, to Oshkosh Corporation, Attention: Secretary (or, if the Executive is then Secretary, to the Chief Executive Officer), 2307 Oregon Street, P.O. Box 2566, Oshkosh, WI 54903-2566, or if to the Executive, at the address set forth below the Executive’s signature to this Agreement, or to such other address as the party to be notified shall have theretofore given to the other party in writing.

24. No Waiver . The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

25. Headings . The headings herein contained are for reference only and shall not affect the meaning or interpretation of any provision of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement the 25 ^th day of January, 2016 to be effective as of January 1, 2016.



	OSHKOSH CORPORATION


	By: /s/ Ignacio A. Cortina
	Name: Ignacio A. Cortina
	Title: Senior Vice President and Secretary


	Attest: /s/ Lori R. Mackey
	Name: Lori R. Mackey
	Title: Assistant Secretary

	EXECUTIVE

	/s/ Wilson R. Jones (SEAL)
	Wilson R. Jones

Exhibit A

CERTAIN DEFINED TERMS

For purposes of this Agreement,

(a) 409A Affiliate . The term “409A Affiliate” means each entity that is required to be included in the Company’s controlled group of corporations within the meaning of Section 414(b) of the Code, or that is under common control with the Company within the meaning of Section 414(c) of the Code; provided , however , that the phrase “at least 50 percent” shall be used in place of the phrase “at least 80 percent” each place it appears therein or in the regulations thereunder.

(b) Act . The term “Act” means the Securities Exchange Act of 1934, as amended.

(c) Accrued Benefits . The term “Accrued Benefits” shall include the following amounts, payable as described herein: (i) all base salary for the time period ending with the Termination Date; (ii) reimbursement for any and all monies advanced in connection with the Executive’s employment for reasonable and necessary expenses incurred by the Executive on behalf of the Company for the time period ending with the Termination Date; (iii) any and all other cash earned through the Termination Date and deferred at the election of the Executive or pursuant to any deferred compensation plan then in effect; (iv) notwithstanding any provision of any bonus or incentive compensation plan applicable to the Executive, but subject to any deferral election then in effect, a lump sum amount, in cash, equal to the sum of (A) any bonus or incentive compensation that has been allocated or awarded to the Executive for a fiscal year or other measuring period under the plan that ends prior to the Termination Date but has not yet been paid (pursuant to Section 5(f) or otherwise) and (B) a pro rata portion to the Termination Date of the aggregate value of all contingent bonus or incentive compensation awards to the Executive for all uncompleted periods under the plan calculated as to each such award as if the target or expected performance Goals with respect to such bonus or incentive compensation award had been attained (reduced, but not below zero, by amounts paid under all such contingent bonuses or incentive compensation awards upon a Change in Control to the extent such amounts relate to the same period of time); and (v) all other payments and benefits to which the Executive (or in the event of the Executive’s death, the Executive’s surviving spouse or other beneficiary) may be entitled as compensatory perquisites or under the terms of any benefit plan of the Company, including (subject to Section 8(a)(i) ) severance payments under the Company’s severance policies and practices in the form most favorable to the Executive that were in effect at any time during the 180-day period prior to the Effective Date. Payment of Accrued Benefits shall be made promptly in accordance with the Company’s prevailing practice with respect to clauses (i) and (ii) or, with respect to clauses (iii), (iv) and (v), pursuant to the terms of the benefit plan or practice establishing such benefits; provided , however , that payments pursuant to clause (iv)(B) shall be paid on the first day of the seventh month following the month in which the Separation from Service occurs, unless the Separation from Service is due to death, in which event such payment shall be made within 90 days of the date of the Executive’s death.

(d) Affiliate and Associate . The terms “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b‑2 of the General Rules and Regulations of the Act.

(e) Annual Cash Compensation . The term “Annual Cash Compensation” shall mean the sum of (A) the Executive’s Annual Base Salary, plus (B) the higher of (1) the highest annual bonus or incentive compensation award earned by the Executive under any cash bonus or incentive compensation plan of the Company or any of its Affiliates during the three complete fiscal years of the Company immediately preceding the Termination Date or, if more favorable to the Executive, during the three complete fiscal years of the Company immediately preceding the Effective Date; or (2) the highest average annual bonus and/or incentive compensation earned during the three complete fiscal years of the Company immediately preceding the Termination Date (or, if more favorable to the Executive, during the three complete fiscal years of the Company immediately preceding the Effective Date) under any cash bonus or incentive compensation plan of the

Company or any of its Affiliates by the group of executives of the Company and its Affiliates participating under such plan during such fiscal years at a status or position comparable to that at which the Executive participated or would have participated pursuant to the Executive’s most senior position at any time during the 180 days preceding the Effective Date or thereafter until the Termination Date.

(f) Cause . The Company may terminate the Executive’s employment after the Effective Date for “Cause” only if the conditions set forth in paragraphs (i) and (ii) have been met and the Company otherwise complies with this Agreement:

(i) (A) the Executive has committed any act of fraud, embezzlement or theft in connection with the Executive’s duties as an executive or in the course of employment with the Company and/or its subsidiaries; (B) the Executive has willfully and continually failed to perform substantially the Executive’s duties with the Company or any of its Affiliates (other than any such failure resulting from incapacity due to physical or mental illness or injury, regardless of whether such illness or injury is job-related) for an appropriate period, which shall not be less than 30 days, after the Chief Executive Officer of the Company (or, if the Executive is then Chief Executive Officer, the Board) has delivered a written demand for performance to the Executive that specifically identifies the manner in which the Chief Executive Officer (or the Board, as the case may be) believes the Executive has not substantially performed the Executive’s duties; (C) the Executive has willfully engaged in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company; (D) the Executive has breached the terms of the Confidentiality Agreement concerning restrictions relating to a Competing Business (as such term is defined in the Confidentiality Agreement); or (E) the Executive has willfully and wrongfully disclosed any Trade Secrets or Confidential Information of the Company or any of its Affiliates (as such terms are defined in the Confidentiality Agreement) or the Executive has otherwise willfully breached the Confidentiality Agreement; and in any such case the act or omission shall have been determined by the Board to have been materially harmful to the Company and its subsidiaries taken as a whole.

For purposes of this provision, (1) no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company and (2) any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Chief Executive Officer or a senior officer of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.

(ii) (A) The Company terminates the Executive’s employment by delivering a Notice of Termination to the Executive, (B) prior to the time the Company has terminated the Executive’s employment pursuant to a Notice of Termination, the Board, by the affirmative vote of not less than three quarters (3/4) of the entire membership of the Board, has adopted a resolution finding that the Executive was guilty of conduct set forth in this definition of Cause, and specifying the particulars thereof in detail, at a meeting of the Board called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) and (C) the Company delivers a copy of such resolution to the Executive with the Notice of Termination at the time the Executive’s employment is terminated.

In the event of a dispute regarding whether the Executive’s employment has been terminated for Cause, no claim by the Company that the Company has terminated the Executive’s employment for Cause in accordance with this Agreement shall be given effect unless the Company establishes by clear and convincing evidence that the Company has complied with the requirements of this Agreement to terminate the Executive’s employment for Cause.

(g) Change in Control . The term “Change in Control” shall mean the occurrence of any one of the following events:

(i) any Person (other than (A) the Company or any of its subsidiaries, (B) a trustee or other fiduciary holding securities under any employee benefit plan of the Company or any of its subsidiaries, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock in the Company (individually, an “Excluded Person” and collectively, “Excluded Persons”)) is or becomes the “Beneficial Owner” (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after July 14, 2008, pursuant to express authorization by the Board that refers to this exception) representing 25 percent or more of (1) the combined voting power of the Company’s then outstanding voting securities or (2) the then outstanding shares of common stock of the Company; or

(ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on July 14, 2008, constituted the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on July 14, 2008, or whose appointment, election or nomination for election was previously so approved; or

(iii) consummation of a merger, consolidation or share exchange of the Company with any other corporation or issuance of voting securities of the Company in connection with a merger, consolidation or share exchange of the Company (or any direct or indirect subsidiary of the Company), other than (A) a merger, consolidation or share exchange that would result in the voting securities of the Company outstanding immediately prior to such merger, consolidation or share exchange continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50 percent of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger, consolidation or share exchange or (B) a merger, consolidation or share exchange effected to implement a recapitalization of the Company (or similar transaction) in which no Person (other than an Excluded Person) is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates after July 14, 2008, pursuant to express authorization by the Board that refers to this exception) representing 25 percent or more of (1) the combined voting power of the Company’s then outstanding voting securities or (2) the then outstanding shares of common stock of the Company; or

(iv) (A) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or (B) the consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets (in one transaction or a series of related transactions within any period of 24 consecutive months), other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity at least 75 percent of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportions as their ownership of the Company immediately prior to such sale.

Notwithstanding the foregoing, (x) no “Change in Control” shall be deemed to have occurred if there is consummated any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of

transactions continue to have substantially the same proportionate ownership in an entity that owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions and (y) solely for purposes of Section 12(b) and the second sentence of the definition of “Effective Date” in this Exhibit A , a “Change in Control” shall be deemed to have occurred only if the applicable event also constitutes a change in control within the meaning of Section 409A of the Code.

(h) Code . The term “Code” means the Internal Revenue Code of 1986, including any amendments thereto or successor tax codes thereof.

(i) Covered Termination . Subject to Section 12(b) , the term “Covered Termination” means any Termination of Employment during the Employment Period where the Termination Date, or the date Notice of Termination is delivered, is any date on or prior to the end of the Employment Period.

(j) Effective Date . The term “Effective Date” shall mean the first date on which a Change in Control occurs. Anything in this Agreement to the contrary notwithstanding, if (i) a Change in Control occurs, (ii) the Executive’s employment with the Employer terminates (whether by the Company, the Executive or otherwise) within 180 days prior to the Change in Control and (iii) it is reasonably demonstrated by the Executive that either (A) any such termination of employment by the Employer (1) was at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (2) otherwise arose in connection with or in anticipation of a Change in Control, or (B) any such Termination of Employment by the Executive took place subsequent to the occurrence of an event described in clause (ii), (iii), (iv) or (v) of the definition of “Good Reason,” which event (1) occurred at the request of a third party who has taken steps reasonably calculated to effect a Change in Control or (2) otherwise arose in connection with or in anticipation of a Change in Control, then for all purposes of this Agreement the term “Effective Date” shall mean the day immediately prior to the date of such termination of employment.

(k) Employer . The term “Employer” means the Company and/or any subsidiary of the Company that employed the Executive immediately prior to the Effective Date.

(l) Good Reason . The Executive shall have a “Good Reason” for termination of employment on or after the Effective Date if the Executive determines in good faith that any of the following events has occurred:

(i) any breach of this Agreement by the Company, including specifically any breach by the Company of its agreements contained in Section 4 , Section 5 or Section 6 , other than an isolated, insubstantial and inadvertent failure not occurring in bad faith that the Company remedies promptly after receipt of notice thereof given by the Executive;

(ii) any reduction in the Executive’s base salary, percentage of base salary available as incentive compensation or bonus opportunity or benefits, in each case relative to those most favorable to the Executive in effect at any time during the 180-day period prior to the Effective Date or, to the extent more favorable to the Executive, those in effect after the Effective Date;

(iii) a material adverse change, without the Executive’s prior written consent, in the Executive’s working conditions or status with the Company or the Employer from such working conditions or status in effect during the 180-day period prior to the Effective Date or, to the extent more favorable to the Executive, those in effect after the Effective Date, including but not limited to (A) a material change in the nature or scope of the Executive’s titles, authority, powers, functions, duties, reporting requirements or responsibilities, or (B) a material reduction in the level of support services, staff, secretarial and other assistance, office space and accoutrements, but excluding for this purpose an isolated, insubstantial and inadvertent event not occurring in bad faith that the Company remedies promptly after receipt of notice thereof given by the Executive;

(iv) the relocation of the Executive’s principal place of employment to a location more than 50 miles from the Executive’s principal place of employment on the date 180 days prior to the Effective Date;

(v) the Employer requires the Executive to travel on Employer business to a materially greater extent than was required during the 180‑day period prior to the Effective Date

(vi) failure by the Company to obtain the agreement referred to in Section 16(a) as provided therein; or

(vii) the Company or the Employer terminates the Executive’s employment after a Change in Control without delivering a Notice of Termination in accordance with Section 12 ;

provided that (A) any such event occurs following the Effective Date or (B) in the case of any event described in clauses (ii), (iii), (iv) or (v) above, such event occurs on or prior to the Effective Date under circumstances described in clause (iii)(B)(1) or (iii)(B)(2) of the definition of “Effective Date.” In the event of a dispute regarding whether the Executive terminated the Executive’s employment for “Good Reason” in accordance with this Agreement, no claim by the Company that such termination does not constitute a Covered Termination shall be given effect unless the Company establishes by clear and convincing evidence that such termination does not constitute a Covered Termination. Any election by the Executive to terminate the Executive’s employment for Good Reason shall not be deemed a voluntary termination of employment by the Executive for purposes of any other employee benefit or other plan.

(m) Indemnified Section 409A Violation . The term “Indemnified Section 409A Violation” means a violation of Section 409A of the Code that occurs in connection with any payment or benefit (or any acceleration of any payment or benefit) in connection with this Agreement or, on or after the Effective Date, the Executive’s employment or the termination thereof as a result of (i) the Company’s clerical error, (ii) the Company’s failure to administer this Agreement or any benefit plan or program in accordance with its written terms, or (iii) the fact that a provision of any benefit plan or program of the Company fails to comply with Code Section 409A, and the Executive incurs additional tax under Section 409A of the Code as a result of such violation.

(n) Normal Retirement Date . The term “Normal Retirement Date” means the date the Executive reaches “Normal Retirement Age” as defined in the Oshkosh Corporation Salaried and Clerical Employees Retirement Plan as in effect on the date hereof, or the corresponding date under any successor plan of the Employer as in effect on the Effective Date.

(o) Notice of Termination . The term “Notice of Termination” means a written notice as contemplated by Section 12 .

(p) Person . The term “Person” shall have the meaning given in Section 3(a)(9) of the Act, as modified and used in Sections 13(d) and 14(d) thereof.

(q) Prime . “Prime” means the rate of interest announced by U. S. Bank, National Association, Milwaukee, Wisconsin, from time to time as its prime or base lending rate.

(r) Section 409A Indemnification . The term “Section 409A Indemnification” means a payment to be made by the Company to the Executive, in the event of an Indemnified Section 409A Violation, such that the net amount of such payment that the Executive retains, after the Executive pays any federal, state, or local income tax or FICA tax on the amount of the Section 409A Indemnification, shall be equal to the Section 409A Tax attributable to the Indemnified Section 409A Violation. For purposes of determining the Section 409A Indemnification amount, the Executive shall be deemed to pay federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation in the calendar year

in which the Section 409A Indemnification is to be paid to the Executive and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s domicile for income tax purposes on the date the Section 409A Indemnification is to be paid to the Executive, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes

(s) Section 409A Tax . The term “Section 409A Tax” means the sum of (i) the 20 percent additional income tax described in Code Section 409A(a)(1)(B)(I)(ii) to the extent such additional tax is incurred by the Executive as a result of an Indemnified Section 409A Violation, (ii) the interest determined to be due under Code Section 409A(a)(1)(B)(I)(i) in connection with the same Indemnified Section 409A Violation, and (iii) any penalties incurred by the Executive in connection with the same Indemnified Section 409A Violation, provided that the Executive pays such additional income tax and related interest and penalties promptly upon being notified that such amount is due. Section 409A Tax does not include any interest or penalties assessed by the Internal Revenue Service on the Executive that are attributable to Executive’s willful misconduct or negligence.

(t) Separation from Service . The term “Separation from Service” means the Executive’s Termination of Employment with the Company and all 409A Affiliates or, if the Executive continues to provide services following his or her Termination of Employment, such later date as is considered a separation from service from the Company and its 409A Affiliates within the meaning of Code Section 409A. Specifically, if the Executive continues to provide services to the Company or a 409A Affiliate in a capacity other than as an employee, such shift in status is not automatically a Separation from Service.

(u) Termination Date . Except as otherwise provided in Section 9(b) , Section 12(b) and Section 16(a) , the term “Termination Date” means (i) if the Termination of Employment is by the Executive’s death, the date of death; (ii) if the Termination of Employment is by reason of voluntary early retirement, as agreed in writing by the Company and the Executive, the date of such early retirement that is set forth in such written agreement; (iii) if the Termination of Employment for purposes of this Agreement is by reason of disability pursuant to Section 11 , 30 days after the Notice of Termination is given; (iv) if the Termination of Employment is by the Executive voluntarily (other than for Good Reason), the date the Notice of Termination is given; and (v) if the Termination of Employment is by the Employer (other than by reason of disability pursuant to Section 11 ) or by the Executive for Good Reason, 30 days after the Notice of Termination is given.


(A)	If termination is for Cause pursuant to Section 7(b) and if the Executive has cured the conduct constituting such Cause as described by the Employer in its Notice of Termination within such 30-day or shorter period, then the Executive’s employment hereunder shall continue as if the Employer had not delivered its Notice of Termination.

(B)

If the Executive shall in good faith give a Notice of Termination for Good Reason and the Company notifies the Executive that a dispute exists concerning the termination within the fifteen day period following receipt thereof, then the Executive may elect to continue the Executive’s employment during such dispute and the Termination Date shall be determined under this paragraph. If the Executive so elects and it is thereafter determined that the Executive terminated the Executive’s employment for Good Reason in accordance with this Agreement, then the Termination Date shall be the earlier of (1) the date on which the dispute is finally determined, either (x) by mutual written agreement of the parties or (y) in accordance with Section 22 or (2) the date of the Executive’s death. If the Executive so elects and it is thereafter determined that the Executive did not terminate the Executive’s employment for Good Reason in accordance with this Agreement, then the employment of the Executive hereunder shall continue after such determination as if the Executive had not delivered the Notice of Termination asserting Good Reason and there shall be no Termination Date arising out of such Notice. In either case, this

Agreement continues, until the Termination Date, if any, as if the Executive had not delivered the Notice of Termination except that, if it is finally determined that the Executive terminated the Executive’s employment for Good Reason in accordance with this Agreement, then the Executive shall in no case be denied the benefits described in Section 8 (including a Termination Payment) based on events occurring after the Executive delivered the Notice of Termination.

(C)

Except as provided in paragraph (A) above, if the party receiving the Notice of Termination notifies the other party that a dispute exists concerning the termination within the fifteen day period following receipt thereof and it is finally determined that termination of the Executive’s employment for the reason asserted in such Notice of Termination was not in accordance with this Agreement, then (1) if such Notice was delivered by the Executive, then the Executive will be deemed to have voluntarily terminated the Executive’s employment other than for Good Reason by means of such Notice and (2) if delivered by the Company, then the Company will be deemed to have terminated the Executive’s employment other than by reason of death, disability or Cause by means of such Notice.

(v) Termination of Employment . The term “Termination of Employment” means a termination of employment of the Executive (A) when the Company and the Executive reasonably anticipate that no further services will be performed by the Executive for the Company and its 409A Affiliates or that the level of bona fide services the Executive will perform as an employee of the Company and its 409A Affiliates will permanently decrease to no more than 20 percent of the average level of bona fide services performed by the Executive (whether as an employee or independent contractor) for the Company and its 409A Affiliates over the immediately preceding 36-month period (or such lesser period of services) or (B) when the Company determines in good faith based on the facts and circumstances in accordance with Code Section 409A, upon a decrease in services by the Executive that is to more than 20 percent of such average level of bona fide services but less than 50 percent, that a Termination of Employment has occurred. The Executive’s termination of employment shall be presumed not to occur where the level of bona fide services performed by the Executive for the Company and its 409A Affiliates continues at a level that is 50 percent or more of the average level of bona fide services performed by the Executive (whether as an employee or independent contractor) for the Company and its 409A Affiliates over the immediately preceding 36-month period (or such lesser period of service). No presumption applies to a decrease in services that is to more than 20 percent of such average level of bona fide services but less than 50 percent, and in such event, whether the Executive has had a Termination of Employment will be determined in good faith by the Company based on the facts and circumstances in accordance with Code Section 409A. Notwithstanding the foregoing, if the Executive takes a leave of absence for purposes of military leave, sick leave or other bona fide leave of absence, then the Executive will not be deemed to have incurred a Separation from Service for the first six months of the leave of absence or, if longer, for so long as the Executive’s right to reemployment is provided either by statute or by contract, including this Agreement; provided that if the leave of absence is due to a medically determinable physical or mental impairment that can be expected to result in death or last for a continuous period of not less than six months, where such impairment causes the Executive to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, the leave may be extended for up to 29 months without causing a Termination of Employment.

Exhibit 31.1

CERTIFICATIONS

I, Wilson R. Jones, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Oshkosh Corporation;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



April 28, 2016	/s/ Wilson R. Jones
	Wilson R. Jones, President and Chief Executive Officer

Exhibit 31.2

CERTIFICATIONS

I, David M. Sagehorn, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Oshkosh Corporation;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



April 28, 2016	/s/ David M. Sagehorn
	David M. Sagehorn, Executive Vice President and Chief Financial Officer

Exhibit 32.1

Written Statement of the President and Chief Executive Officer

Pursuant to 18 U.S.C. §1350

Solely for the purposes of complying with 18 U.S.C. §1350, I, the undersigned President and Chief Executive Officer of Oshkosh Corporation (the “Company”), hereby certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2016 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



/s/ Wilson R. Jones
Wilson R. Jones
April 28, 2016

Exhibit 32.2

Written Statement of the Executive Vice President and Chief Financial Officer

Pursuant to 18 U.S.C. §1350

Solely for the purposes of complying with 18 U.S.C. §1350, I, the undersigned Executive Vice President and Chief Financial Officer of Oshkosh Corporation (the “Company”), hereby certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2016 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



/s/ David M. Sagehorn
David M. Sagehorn
April 28, 2016