OSHKOSH CORPORATION NOTES OF CONSOLIDATED FINANCIAL STATEMENTS
Market Risks — The Company was contingently liable under bid, performance and specialty bonds totaling $3.38 billion and $2.86 billion at December 31, 2025 and 2024, respectively. Outstanding letters of credit issued by the Company’s banks in favor of third parties totaled $40.8 million and $46.5 million at December 31, 2025 and 2024, 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 such matters and claims cannot be predicted with certainty, management believes that the ultimate resolution 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. Certain risks are inherent in doing business with the DoD, including technological changes and changes in levels of defense spending. The USPS and all DoD contracts contain a provision that they may be terminated at any time at the convenience of the customer. In such an event, the Company is entitled to recover allowable costs plus a reasonable profit earned to the date of termination. Major contracts for defense and delivery vehicles 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. Because the Company is a relatively large defense contractor, the Company’s U.S. government contract operations are subject to extensive annual audit processes and to U.S. government investigations of business practices and cost classifications from which legal or administrative proceedings can result. Based on U.S. government procurement regulations, under certain circumstances the Company could be fined, as well as suspended or debarred from U.S. government contracting. During a suspension or debarment, the Company would also be prohibited from selling equipment or services to customers that depend on loans or financial commitments from the Export-Import Bank, Overseas Private Investment Corporation and similar U.S. government agencies. 20. Shareholders’ Equity Changes to the Company's common shares outstanding were as follows (in shares): Year Ended December 31, 2025 2024 2023 Outstanding at beginning of period 64,602,007 65,473,807 65,472,148 Repurchases of Common Stock (2,280,539) (1,058,474) (265,795) Exercise of stock options 91,305 65,253 122,128 Payment of stock-based restricted and performance shares 308,259 216,778 255,927 Shares tendered for taxes on stock-based compensation (142,989) (101,920) (118,310) Other 11,427 6,563 7,709 Outstanding at end of period 62,589,470 64,602,007 65,473,807 In May 2022, the Board of Directors authorized the Company to repurchase 12,000,000 shares of Common Stock. As of December 31, 2025, 7,945,869 shares of Common Stock remained under this authority.
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