OSHKOSH CORPORATION NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
With the exception of Pierce in the Vocational segment, the Company’s contracts typically do not contain a significant financing component. Pierce customers earn interest on customer advances at a rate determined in a separate financing transaction between Pierce and the customer at the time of receipt. Interest on customer advances is recorded in “Interest expense” and was $51.0 million, $39.2 million and $25.9 million in 2025, 2024 and 2023, respectively. In instances where a customer pays consideration in advance or when the Company is entitled to bill a customer in advance of recognizing the related revenue, the Company records a contract liability. The Company reduces contract liabilities when the Company transfers control of the promised goods and services. Contract assets and liabilities are determined on a net basis for each contract. Contract liabilities consisted of the following (in millions): December 31, 2025 2024 Customer advances $ 737.1 $ 648.8 Other current liabilities 134.6 113.6 Non-current customer advances 1,222.7 1,154.4 Other non-current liabilities 85.1 72.7 Total contract liabilities $ 2,179.5 $ 1,989.5 Revenue recognized during the period from beginning of the year contract liabilities was as follows (in millions): Year Ended December 31, 2025 2024 2023 Beginning liabilities recognized in revenue $ 640.5 $ 640.7 $ 582.7 The Company offers a variety of service-type warranties, including optionally priced extended warranty programs. Outstanding balances related to service-type warranties are included within contract liabilities. Revenue related to service- type warranties is deferred until after the expiration of the standard warranty period. The revenue is then recognized ratably over the term of the service-type warranty period. Changes in the Company’s service-type warranties were as follows (in millions): Year Ended December 31, 2025 2024 2023 Balance at beginning of period $ 96.0 $ 85.4 $ 76.1 Deferred revenue for new service warranties 52.7 43.7 34.2 Amortization of service warranty revenue (39.6) (32.9) (25.1) Foreign currency translation 1.3 (0.2) 0.2 Balance at end of period $ 110.4 $ 96.0 $ 85.4 Classification of service-type warranties in the Consolidated Balance Sheets consisted of the following (in millions): December 31, 2025 2024 Other current liabilities $ 39.3 $ 36.0 Other non-current liabilities 71.1 60.0 $ 110.4 $ 96.0
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