Cautionary Statement About Forward-Looking Statements

This Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations and other sections of this 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 report, including, without limitation, statements regarding the Company's future financial position, business strategy, targets, projected sales, costs, earnings, capital expenditures, debt levels and cash flows, and plans and objectives of management for future operations, including those under the caption "Executive Overview," are forward-looking statements. When used in this 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 consequences of financial leverage associated with the JLG acquisition, including the level of the Company's borrowing costs, the increased interest rates the Company would face if it experienced a deterioration or downgrade in credit agency ratings and the Company's ability to maintain compliance with its financial covenants under its Credit Agreement; the cyclical nature of the Company's access equipment, commercial and fire & emergency markets, especially during a global recession and credit crisis; the duration of the global recession, which could lead to additional impairment charges related to many of the Company's intangible assets; risks related to the required rapid increase in the rate of production for the MRAP All Terrain Vehicle ("M-ATV") contract and the amount, if any, of additional orders for M-ATVs that the Company may receive; the expected level and timing of U.S. Department of Defense ("DoD") procurement of products and services and funding thereof; risks related to reductions in government expenditures and the uncertainty of government contracts; risks related to production delays as a result of the economy's impact on the Company's suppliers; the potential for commodity costs to rise sharply in a future economic recovery; risks associated with international operations and sales, including foreign currency fluctuations; risks related to the collectability of receivables during a recession, particularly for those businesses with exposure to construction markets; and the potential for increased costs relating to compliance with changes in laws and regulations. Additional information concerning 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 July 30, 2009 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 earnings 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, industrial, institutional and general maintenance applications to position workers and materials at elevated heights. Access equipment customers include equipment rental companies, construction contractors, manufacturing companies, home improvement centers and the U.S. military.

Defense- heavy- and medium-payload tactical trucks 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, ambulances, wreckers, carriers and other emergency vehicles primarily sold to fire departments, airports, other governmental units and towing companies in the U.S. and abroad, mobile medical trailers sold to hospitals and third-party medical service providers in the U.S. and Europe and broadcast vehicles sold to broadcasters and television stations in North America and abroad.

Executive Overview

In the third quarter of fiscal 2009, significant weakness in demand at a number of the Company's businesses continued, and in some cases intensified, as a result of the global recession and tight credit markets. This led to a continuation in the third quarter of a fiscal 2009 trend of sharply lower sales in the quarter compared to the prior year quarter and a net loss for the quarter. The global recession and tight credit markets have caused the Company to implement severe cost reductions across its businesses to cope with the lower sales and to comply with the financial covenants under its Credit Agreement (as defined in "Liquidity and Capital Resources - Liquidity"). These conditions also resulted in the Company recognizing $1.2 billion of pre-tax, non-cash impairment charges in the second quarter of fiscal 2009. The Company expects virtually all its non-defense businesses to continue to experience significant weakness in demand into and probably through fiscal 2010. However, the Company expects a number of recent positive developments will improve Company performance, largely beginning in fiscal 2010, including an award of a sole source contract for M-ATVs, emerging demand for the retrofit of some of the U.S. Mine Resistant Ambush Protected ("MRAP") fleet with the Company's TAK-4® independent suspension and the sale of the Geesink Norba Group ("Geesink").

The global recession and tight credit markets contributed to a 36% reduction in consolidated sales in the quarter as compared to the third quarter of fiscal 2008. The Company's access equipment and concrete placement products businesses experienced the sharpest declines, with sales for each declining approximately 75%. These businesses did not experience the typical seasonal increases in sales in the third fiscal quarter compared with sequentially previous quarters. With persistently low residential and non-residential construction spending, limited credit availability and high unemployment levels, the Company does not expect to see significant improvement in sales at these businesses until fiscal 2011.

Lower operating income in the third quarter of fiscal 2009 resulted largely from lower sales volume in the access equipment and commercial segments, which was partially mitigated by strong defense, domestic fire apparatus and airport products results and proactive management of operating costs through cost reductions implemented throughout the fiscal year. An increase in the provisions for credit losses of $31.1 million offset in large part by cost reduction measures, resulted in an increase in overall consolidated selling, general and administrative expenses of $5.9 million during the quarter as compared to the third quarter of fiscal 2008. The Company's defense segment had a strong third fiscal quarter, with operating income up 39.5% to $92.9 million. The segment benefited from increased demand for heavy-payload tactical vehicles and armor kits and the start of TAK-4 independent suspension sales for insertion in the U.S. fleet of MRAP vehicles.

Looking forward, the Company expects that weak municipal, state and federal tax receipts will lead to lower demand in the Company's domestic fire apparatus, airport products and refuse collection vehicle ("RCV") businesses which have each reported positive or relatively flat results in fiscal 2009. The Company further expects that very low demand will likely continue for virtually all its other non-defense businesses. However, the Company expects sharply improved results in its defense business will contribute to improved overall Company performance in fiscal 2010 based on strong federal funding for its current programs and anticipated new business. On June 30, 2009, the Company was awarded a sole source contract for 2,244 M-ATVs, valued at $1.05 billion, which are scheduled to be delivered by December 31, 2009. The Company anticipates receipt of additional delivery orders for M-ATVs to extend deliveries into calendar 2010. The Company has also received contracts totaling $176 million (including $44 million related to an order received subsequent to June 30, 2009) to upgrade U.S. MRAP vehicles with TAK-4 independent suspensions with deliveries beginning in June 2009 and extending through December 2009. The Company is actively supporting the engineering and testing for installation of TAK-4 onto other MRAP models that could lead to additional TAK-4 independent suspension sales in fiscal 2010.

During the second quarter of fiscal 2009, the Company implemented a number of cost reduction actions including staffing reductions, wage cuts for all domestic salaried employees, the elimination of bonuses and 401(k) contribution matches for most employees and periodic furloughs for a large percentage of employees. With the award of the M-ATV contract, the Company is reviewing its options regarding the reversal of some of the compensation adjustments that have been implemented. The Company is waiting to learn of any additional M-ATV delivery orders and their magnitude to assess whether any of the previously implemented compensation reductions will be restored.

On July 1, 2009, the Company concluded the sale of its European RCV business, Geesink. In spite of aggressive actions during the past three fiscal years to restructure this business and return it to profitability, the business continued to incur operating losses in the first nine months of fiscal 2009. The Company believes that its performance can be enhanced by redeploying its resources from Geesink to support its other businesses. The Company has reflected the financial results of Geesink as discontinued operations in the Condensed Consolidated Statements of Operations for all periods presented. The Company expects to record a non-cash pre-tax gain on sale of approximately $35 million, which will be recorded in discontinued operations in the Company's fourth fiscal quarter results. In addition, the Company is in the process of restructuring the former holding company parent of Geesink. This restructuring is expected to result in a tax benefit of $60-$75 million to be recorded in the fourth quarter of fiscal 2009. The majority of this tax credit will be recorded in discontinued operations.

Results of Operations
Analysis of Consolidated Net Sales

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

                                            Third Quarter         First Nine Months
                                               Fiscal                  Fiscal
                                          2009        2008        2009        2008
                                       ----------- ----------- ----------- -----------
       Net sales
         Access equipment              $   211.2   $   920.2   $   828.8   $ 2,343.8
         Defense                           605.4       489.5     1,739.4     1,338.5
         Fire & emergency                  299.6       281.3       863.8       826.3
         Commercial                        138.4       245.2       459.6       616.3
         Intersegment eliminations         (28.4 )     (16.1 )     (83.3 )     (42.6 )
                                       ---------   ---------   ---------   ---------
           Consolidated                $ 1,226.2   $ 1,920.1   $ 3,808.3   $ 5,082.3
                                       ---------   ---------   ---------   ---------

Third Quarter Fiscal 2009 Compared to 2008

Consolidated net sales decreased 36.1% to $1.23 billion for the third quarter of fiscal 2009 compared to the third quarter of fiscal 2008.

Access equipment segment net sales decreased 77.0% to $211.2 million for the third quarter of fiscal 2009 compared to the third quarter of fiscal 2008. Sales reflected substantially lower global demand arising from recessionary economies and tight credit markets. Equipment sales for the North American and the European, African and Middle Eastern regions each declined nearly 85% in the third quarter of fiscal 2009 compared to record high sales in the third quarter of fiscal 2008.

Defense segment net sales increased 23.7% to $605.4 million for the third quarter of fiscal 2009 compared to the third quarter of fiscal 2008. The increase was due to an increase in sales of heavy-payload tactical vehicles and higher parts & service sales to fulfill the continuing requirements of the Company's largest customer, the DoD. Sales of new and remanufactured heavy-payload tactical vehicles to the U.S. Army were up significantly in the third quarter of fiscal 2009 compared to the prior year quarter. Defense segment sales during the third quarter of fiscal 2009 also benefited from the sale of reducible-height armor kits for Medium Tactical Vehicle Replacement trucks for the U.S. Marine Corps and the sale of TAK-4 independent suspension systems for MRAP vehicles.

Fire & emergency segment net sales increased 6.5% to $299.6 million for the third quarter of fiscal 2009 compared to the third quarter of fiscal 2008. The increase in sales reflected higher sales at the Company's domestic fire apparatus and airport products businesses, offset in part by weaker sales of towing and recovery equipment. The towing and recovery equipment business continued to be impacted by weak demand and tight credit markets.

First Nine Months of Fiscal 2009 Compared to 2008

Consolidated net sales decreased 25.1% to $3.81 billion for the first nine months of fiscal 2009 compared to the first nine months of fiscal 2008.

Access equipment net sales decreased 64.6% to $828.8 million for the first nine months of fiscal 2009 compared to the first nine months of fiscal 2008. Sales reflected substantially lower demand globally arising from recessionary economies and tight credit markets. European, African and Middle Eastern and North American equipment sales each declined approximately 70% while the rest of world equipment sales were down about 45%.

Defense segment net sales increased 29.9% to $1,739.4 million for the first nine months of fiscal 2009 compared to the first nine months of fiscal 2008. The increase was attributable to the continuing requirements of the DoD. During the first nine months of fiscal 2009, the Company experienced a substantial increase in sales of heavy-payload tactical vehicles and armor kits for the DoD.

Fire & emergency segment net sales increased 4.5% to $863.8 million for the first nine months of fiscal 2009 compared to the first nine months of fiscal 2008. The increase in sales was largely due to increased shipments of fire apparatus both domestically and internationally as well as increased demand for airport products equipment. This increase was offset in part by continued weak demand for towing and recovery equipment generally due to the global recession and inability of end customers to obtain adequate financing.

Commercial segment net sales declined 25.4% to $459.6 million for the first nine months of fiscal 2009 compared to the first nine months of fiscal 2008. The decline in sales was largely due to continued lower concrete placement product sales due to a slowdown in U.S. residential and nonresidential construction activity attributable to the global recession.