NON-GAAP FINANCIAL MEASURES The Company is forecasting earnings per share excluding items that affect comparability. When the Company forecasts earnings per share, excluding items, this is considered a non-GAAP financial measure. The Company believes excluding the impact of these items is useful to investors to allow a more accurate comparison of the Company’s operating performance to prior year results. However, while forecasted adjusted earnings per share excludes amortization of purchased intangibles, revenue and earnings of acquired companies are reflected in forecasted adjusted earnings per share and intangible assets contribute to the generation of revenue and earnings. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s results or forecasts prepared in accordance with GAAP. The table below presents a reconciliation of the Company’s presented non-GAAP measure to the most directly comparable GAAP measure: 2026 Expectations Earnings per share-diluted (GAAP) $ 10.90 Amortization of purchased intangibles, net of tax 0.60 Adjusted earnings per share-diluted (non-GAAP) $ 11.50 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to market risk from changes in interest rates, certain commodity prices and foreign currency exchange rates. To mitigate the risk from changes in foreign currency exchange and interest rates, the Company selectively uses financial instruments. All hedging transactions are authorized and executed pursuant to clearly defined policies and procedures, which strictly prohibit the use of financial instruments for speculative purposes. Interest Rate Risk. The Company’s earnings exposure related to adverse movements in interest rates is primarily derived from outstanding floating rate debt instruments that are indexed to short-term market interest rates. In this regard, changes in U.S. and offshore interest rates affect interest payable on the Company’s borrowings under the Credit Agreement and Term Loan. At December 31, 2025, the Company had variable rate-based debt of $500 million outstanding under its Term Loan, which bore an interest rate of 4.6%. There were no borrowings outstanding under the Revolving Credit Facility as of December 31, 2025. As a result, the Company's exposure to interest rate risk was limited given the magnitude of the Term Loan. Commodity Price Risk. The Company is a purchaser of certain commodities, including steel, aluminum and composites. In addition, the Company is a purchaser of components and parts containing various commodities, including steel, aluminum, copper, rubber and others which are integrated into the Company’s end products. The Company generally buys these commodities and components based upon market prices that are established with the vendor as part of the purchasing process. The Company does not use commodity financial instruments to hedge commodity prices. Commodity costs may also be affected by changes in trade policies, including the imposition of tariffs, duties or other import-related charges. The Company generally obtains firm quotations from its significant components’ suppliers for its orders under firm, fixed-price contracts in its Transport segment when possible. In the Company’s Access and Vocational segments, the Company generally attempts to obtain firm pricing from most of its suppliers, consistent with backlog requirements and/or forecasted annual sales. To the extent that commodity prices increase, including from tariff-related impacts, and the Company does not have firm pricing from its suppliers, or its suppliers are not able to honor such prices, the Company may experience margin declines to the extent it is not able to increase selling prices of its products or otherwise mitigate these cost increases. Foreign Currency Risk. The Company’s operations consist of manufacturing in the U.S., Mexico, Canada, France, Australia, the United Kingdom, Italy, Spain and China and sales and limited vehicle body mounting activities on five continents. International sales comprised approximately 18% of overall net sales in 2025, of which approximately 47% involved exports from the U.S. The majority of export sales in 2025 were denominated in U.S. dollars. As a result of the manufacture and sale of the Company’s products in foreign markets, the Company’s earnings are affected by fluctuations in the value of foreign currencies in which certain of the Company’s transactions are denominated as compared to the value of the U.S. dollar. The Company’s operating results are principally exposed to changes in exchange rates between the U.S. dollar and Euro, British pound sterling, Australian dollar, Mexican peso, Chinese renminbi and Canadian dollar.
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