OSHKOSH CORPORATION NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
The Credit Agreement and the Term Loan require the Company to maintain a maximum leverage ratio (defined as, with certain adjustments, the ratio of the Company’s consolidated indebtedness to the Company’s consolidated net income for the previous four quarters before interest, taxes, depreciation, amortization, non-cash charges and certain other items (EBITDA)) as of the last day of any quarter of 3.75 to 1.00, subject to the Company’s right to temporarily increase the maximum leverage ratio to 4.25 to 1.00 in connection with certain material acquisitions. The Company was in compliance with the financial covenants contained in the Credit Agreement and the Term Loan as of December 31, 2025. In May 2018, the Company issued $300 million of 4.60% unsecured senior notes due May 15, 2028 (the “2028 Senior Notes”). In February 2020, the Company issued $300 million of 3.10% unsecured senior notes due March 1, 2030 (the “2030 Senior Notes”). The 2028 Senior Notes and the 2030 Senior Notes were issued pursuant to an indenture (the “Indenture”) between the Company and a trustee. The Indenture contains customary affirmative and negative covenants. The Company has the option to redeem the 2028 Senior Notes and the 2030 Senior Notes at any time for a premium. The fair value of the long-term debt is estimated based upon Level 2 inputs to reflect the market rate of the Company’s debt. At December 31, 2025, the fair value of the 2028 Senior Notes and the 2030 Senior Notes was estimated to be $303 million ($296 million at December 31, 2024) and $285 million ($273 million at December 31, 2024), respectively. The carrying amount of the Term Loan approximated fair value as of December 31, 2025. See Note 23 for the definition of a Level 2 input. 17. Warranties The Company’s products generally carry standard 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, batteries, 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. 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, results of operations or cash flows. Changes in the Company’s assurance-type warranty liabilities were as follows (in millions): Year Ended December 31, 2025 2024 2023 Balance at beginning of period $ 72.8 $ 64.2 $ 58.8 Warranty provisions 78.1 67.3 52.1 Settlements made (88.7) (60.1) (51.3) Changes in liability for pre-existing warranties, net 24.9 0.5 (0.3) Acquisition of businesses — 1.1 4.8 Foreign currency translation 0.6 (0.2) 0.1 Balance at end of period $ 87.7 $ 72.8 $ 64.2 The liabilities associated with service-type warranties are disclosed in Note 4.
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