Greetings. Welcome to Oshkosh Corporation Reports Fiscal 2021 Fourth Quarter and Full Year Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Patrick Davidson, Senior Vice President of Investor Relations for Oshkosh Corporation. Thank you, Mr. Davidson. You may begin. Good morning, and thanks for joining us. Earlier today, we published our fourth quarter 2021 results. A copy of the release is available on our website at oshkoshcorp.com. Today's call is being webcast and is accompanied by a slide presentation, which includes a reconciliation of GAAP to non-GAAP financial measures that we will use during this call, and is also available on our website. The audio replay and slide presentation will be available on our website for approximately 12 months. Please refer now to slide two of that presentation. Our remarks that follow, including answers to your questions, contain statements that we believe to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements are subject to risks that could cause actual results to be materially different from those expressed or implied by such forward-looking statements. These risks include, among others, matters that we have described in our Form 8-K filed with the SEC this morning and filings we make with the SEC. We disclaim any obligation to update these forward-looking statements, which may not be updated until our next quarterly earnings conference call, if at all. As we highlighted in our business update on October 8, 2021, we are changing our fiscal year to the calendar year. The October to December 2021 quarter will represent an abbreviated fiscal year or stub period to facilitate the transition to our first full calendar year, which will begin on January 1, 2022. This change should provide us with better visibility as our planning and reporting cycles will be aligned with those of many of our customers and suppliers. As a result, all references on this call to a quarter or year in 2021 or before are to a fiscal quarter or fiscal year, unless stated otherwise. All references to 2022 or later years as to a quarter or a year are to a calendar year. Our presenters today include John Pfeifer, President and Chief Executive Officer, and Mike Pack, Executive Vice President and Chief Financial Officer. Please turn to slide three, and I'll turn it over to you, John. Thank you, Pat, and good morning, everyone. As we discuss our fourth quarter and full year results, I want to provide some color on the current business environment. It's clear that we're in a unique period of time with robust customer demand for our market-leading products while facing one of the most challenging global supply chain, logistics, and workforce availability environments in decades. These factors are limiting production and also contributing to manufacturing labor inefficiencies. At the same time, we're facing significant material cost inflation. We view these challenges as temporary, and we believe we are taking the right actions to position our company for success as we emerge from the current environment as a stronger, more resilient business. Some examples of the actions include implementing multiple price increases in the last several months in our non-Defense segments to mitigate cost inflation, redesigning many of our JLG products to accept higher capability microprocessors, which are produced in higher quantities by chip makers to reduce our risk of shortages, shifting production within our existing facilities to better align with labor availability, and we're undertaking a rigorous qualifying process to identify and engage hundreds of new suppliers to drive a more robust supply chain for key materials and components. Our long-term outlook is attractive based on strong market fundamentals, strategic program wins, and a comprehensive offering of innovative new products that will drive continued market leadership. With this backdrop, we reported 15.6% higher revenues on sales growth in our Access Equipment, Defense, and Fire and Emergency segments. This led to fourth quarter adjusted earnings per share of $1.05, slightly above the estimated range included in our October 8 business update. The modest increase was driven by a lower effective tax rate. We continued our commitment to responsible capital allocation with increased share repurchases in the quarter, which Mike will discuss. I'm also pleased to announce that our board approved a 12% increase in our quarterly dividend from $0.33 to $0.37, which represents the 8th consecutive year of double-digit percentage increases. Now, let's move to the full year. Please turn to slide four. We grew revenues by just under 13% for the year and adjusted earnings per share by 16.4%. This led to a full year record for free cash flow of more than $1.1 billion. Importantly, we have an opportunity to grow revenue and EPS over the next few years based on our innovative products and strong market drivers. We also have a strong foundation of programs in our defense segment, bolstered by a significant recent program wins, including United States Postal Service Next Generation Delivery Vehicle and the U.S. Army's Medium Caliber Weapon System. 2021 was a year of significant electrification announcements for our company. Beyond the USPS win, we launched our revolutionary new Volterra family of electric fire trucks, including the Pierce Volterra electric custom pumper, currently in service in Madison, Wisconsin. The Volterra electric ARFF truck, which was a major highlight for attendees at the Advanced Clean Transportation Expo back in late August. The expo brings together participants from across the globe to discuss and demonstrate clean technologies for commercial applications. Customer response to these electrified products has been outstanding. We made several important investments in 2021, including the acquisition of Pratt Miller and a strategic investment and partnership with Microvast. We wrapped the year up with a minority investment and strategic partnership with Carnegie Foundry to build upon our autonomy and robotics capabilities. We also announced a minority investment in wildland fire truck market leader, Boise Mobile Equipment. These investments highlight our commitment to advance into new markets and leverage technology to both enhance our product offerings and drive profitable growth as part of our long-term strategy. We have also continued our commitment to environmental, social, and governance leadership as evidenced by our investments in electric vehicle technologies while fostering an inclusive culture and continuing to deliver on our high governance standards. For many years, MOVE, M-O-V-E, was our strategy. Over the past year, we evolved beyond MOVE and have introduced our strategy summarized with three simple words, innovate, serve, advance. We believe this strategy provides the necessary framework to continue to drive long-term sustainable growth, and it is grounded in our purpose, making a difference in people's lives. We innovate customer solutions by combining leading technologies and operational strength to empower and protect the everyday hero. We serve and support those who rely on us with a relentless focus throughout the product life cycle. We advance by expanding into new markets and geographies to make a difference around the world. We're excited about the direction we're headed and believe that innovate, serve, advance provides the roadmap to get us there. I invite you to check out the details of our strategy on the Oshkosh website. Please turn to slide five, and we'll get started with our segment updates with access equipment. Much like we discussed on our last call, demand for our industry-leading access equipment remains very strong, but near-term results are being meaningfully impacted by supply chain and logistics challenges as well as higher input costs. Access equipment, which faced an extreme decline in demand in 2020 as a result of the COVID-19 pandemic, has since experienced the most rapid rebound of any of our businesses. The rapid return of demand in 2021 exacerbated the supply chain challenges we have been facing, and we believe it will remain choppy well into 2022. Our access team continues to work hard to source components to build and ship products to customers around the globe. Despite these challenges, we delivered strong revenue growth of 37% in the fourth quarter, leading to 22% revenue growth for the full year. We have taken multiple pricing actions over the past several months based on rising input costs, which we expect will largely address price cost challenges by the end of the second quarter of 2022. Of course, we will continue to be diligent in our pricing approach should input costs increase further. Orders came in at $1.9 billion in the fourth quarter, representing a quarterly record for the segment, leading to a record backlog of $2.8 billion at September 30th. The rental equipment market is strong and the access leadership team has taken measured steps to preserve the health of the industry by addressing unfair competition through our trade case. We believe that we are in the early stages of a multi-year growth cycle for access equipment as the rental companies work to lower the overall age of their fleets, which were at historically high levels entering 2021. I want to emphasize that our growth outlook is underpinned by strong market fundamentals and our continued launch of innovative product offerings, such as the DaVinci all-electric scissor that you've heard me talk about and many other new product launches in recent quarters. Our trend of new product launches continued in the fourth quarter. We're entering the North American telehandler market for agriculture in a more significant way with a new 9,000-pound capacity model. We are also expanding our industry-leading U.S. telehandler family with a new line of rotating telehandlers with our Italian partner, Dieci. I look forward to discussing additional new products with you in the coming quarters. Please turn to slide six, and I'll review our defense segment. Our defense team delivered a solid fourth quarter leading to a full year revenue of $2.53 billion, an increase of almost 10% and an operating margin of nearly 8% in this very challenging supply chain environment. You're all familiar with the JLTV, one of our foundational and enduring programs. We've been showcasing the vehicle's ability to serve as a long-range weapons platform in either manned or semi-autonomous modes. These capabilities directly support the Department of Defense's focus on near peer threats. Domestic and international customers continue to be impressed with the JLTV's outstanding versatility. We are also preparing for the upcoming recompete scheduled in 2022, and believe we are well positioned to win the follow-on contract. As we've discussed over the past several quarters, we are actively competing for a number of adjacent programs, including the CATV, a tracked vehicle for Arctic climates, the OMFV, which is planned to replace the Bradley fighting vehicle, and the EHET or the Enhanced Heavy Equipment Transporter, among many others. The acquisition of Pratt Miller significantly enhances our ability to win adjacent programs, just like it helped us win the MCWS contract earlier in 2021. Before I leave defense, I'd like to make a few comments about our Next Generation Delivery Vehicle contract with the United States Postal Service. We continue to work with the customer to finalize some of the vehicle's parameters. We are also on track with setting up our new facility in South Carolina and expect a successful product launch in the back half of 2023. This is a 10-year contract that calls for between 50,000 and 165,000 vehicles with a mix of both zero emission battery electric vehicles and fuel efficient ICE vehicles, and allows the USPS to electrify its fleet. Let's turn to slide seven for a discussion of the Fire and Emergency segment. The Fire and Emergency segment delivered another strong quarter with an operating income margin of 14% despite the challenging supply chain environment and extreme cost inflation. Even more impressive is the fact that our team at F&E delivered an all-time record for operating income margin for a full year at 14.2%. The municipal market remains strong, and we're encouraged by the record orders we booked last year, which led to our year-end record backlog. We are tempered in our outlook for the stub period as a result of near-term supply chain disruptions we've talked about during this call. Of course, we expect to overcome these hurdles in time, and we are planning an expansion of our Appleton manufacturing sites that will support long-term growth. As I mentioned earlier, our Volterra electric custom pumper is serving frontline duty in Madison, and we recently announced an agreement with Portland to work with them on Volterra as well. We are receiving a steady stream of inquiries from fire departments around the United States, and our Volterra electric ARFF vehicle has been receiving rave reviews while conducting demos at airports around the U.S. As I close out my comments in F&E, I want to welcome Boise Mobile Equipment to the Pierce family. Boise is the industry leader in wildland firefighting trucks. Our minority investment will bring the Boise product into our dealer network and allow both Pierce and Boise to take advantage of this growing segment of the market. Please turn to slide eight, and we'll talk about our commercial segment. Similar to our other segments, commercial delivered solid results in 2021. In fact, the team posted its best full year adjusted operating income margin in the past 15 years. That's an impressive accomplishment in this difficult supply chain environment with record high steel costs. As many of you are aware, we build RCVs and rear discharge concrete mixers on third-party chassis, either purchased by us and supplied to customers with a body and a complete package or furnished by our customers. This represents a meaningful risk as chassis availability has worsened over the past couple of months, and we expect it will remain a challenge for much of 2022. Demand for RCVs and mixers has been strong, and we have a solid outlook for both markets. Residential construction as well as other construction indicators are positive, and elevated customer fleet ages are creating additional demand for replacement. Our outlook is further supported by solid orders in the quarter for both RCVs and mixers as the U.S. and Canada move beyond the pandemic. These orders led to an all-time high backlog of just under $570 million, providing good visibility into 2022. I'm going to turn it over to Mike to discuss our fourth quarter results and expectations for the stub period. Thanks, John, and good morning, everyone. Please turn to slide nine. As John highlighted, we faced significant supply chain and logistics disruptions in the fourth quarter, well beyond our experience in the third quarter. We also experienced meaningful material cost inflation. Recall that we account for inventory on a last in, first out basis, so the additional cost escalation we saw in purchases in the fourth quarter negatively impacted price-cost dynamics, particularly at access equipment. We previously expected a consolidated year-over-year price cost headwind of $35 million in the quarter. The actual price-cost impact increased to approximately $60 million. Supply chain disruptions, unfavorable price cost dynamics, and labor constraints all contributed to fourth quarter financial results significantly lower than the expectations discussed on our third quarter call. Consolidated sales for the fourth quarter were $2.06 billion or $279 million higher than the prior year, representing a 16% increase. The consolidated sales increase was driven by a 37% increase at Access Equipment, a 5% increase at Defense, and a 10% increase at Fire and Emergency, partially offset by a 6% decrease at Commercial. Access Equipment sales increased by $230 million over the prior year quarter due to improved market demand led by North America. As the impact of the pandemic has waned, the sales increase was lower than our prior expectations by approximately $130 million, largely due to the previously mentioned supply chain disruptions. Defense sales increased in the quarter due to higher JLTV sales as well as the benefit of Pratt Miller sales, which we acquired in the second quarter, partially offset by lower FMTV and international sales. Fire & Emergency sales increased in the quarter on higher ARFF deliveries, and Commercial sales were down on lower package sales. Consolidated adjusted operating income for the fourth quarter was $104.2 million or 5.1% of sales compared to $124.1 million or 7% of sales in the prior year quarter. Access Equipment adjusted operating income decreased as a result of unfavorable price cost dynamics, the return of spending subject to temporary cost reductions in the prior year, and unfavorable product liability largely offset by an increase in sales and improved manufacturing absorption. Defense adjusted operating income decreased as a result of unfavorable product mix, increased material costs, and unfavorable production variances partially offset by higher sales volume. Fire and Emergency adjusted operating income decreased in the current year quarter as a result of higher material costs, unfavorable manufacturing efficiencies, and the return of spending subject to temporary cost reductions in the prior year, offset in part by higher sales and improved pricing. In Commercial segment, adjusted operating income decreased as a result of unfavorable material costs and the return of spending subject to temporary cost reductions in the prior year, offset in part by improved manufacturing absorption and improved pricing. Adjusted earnings per share for the quarter was $1.05 compared to adjusted EPS of $1.30 in the prior year. During the quarter, we repurchased approximately 821,000 shares of common stock for a total cost of $95 million. Please turn to slide 10 for a discussion of our expectations for the stub period. We expect that the challenges we face in the fourth quarter of 2021 will continue into the stub period. Demand remains robust across the company as indicated by our strong order rates in the fourth quarter and record year-end backlogs in several segments. However, the current supply chain and logistics disruptions are making it difficult to forecast sales volume. While our backlogs support a 10%-15% sales increase in the stub period versus the first quarter of 2021, we expect parts availability will likely constrain our ability to deliver higher sales. As a result of this uncertainty, we're unable to provide quantitative expectations for the stub period at this time. We do expect that stub period EPS will be significantly lower than the first quarter of 2021 and may approach break-even levels on a consolidated basis. We expect that unfavorable price cost dynamics will be a $75 million-$85 million headwind versus the first quarter of 2021. Steel and other component costs have continued to increase. We have taken multiple pricing actions in our non-defense businesses over the past several months, and in many cases, prices are now greater than 10% above early 2021 levels. We believe these price increases will enable us to achieve price-cost equilibrium, but we still need to work through large backlogs, so it will take until the end of the second quarter of 2022 for these pricing actions to largely catch up with cost escalation. If we experience further escalation, we expect to take further pricing action. We also expect higher spending levels in the stub period versus the first quarter of 2021. Last year, COVID-19 infection rates spiked early in our first quarter, and our spending levels remained low. Since then, our spending levels have begun to normalize in areas such as travel, advertising, and medical. We also expect that parts availability constraints will continue to drive labor inefficiencies. While the current environment is challenging, we are taking appropriate actions and believe that supply chain constraints will subside over time, and the longer-term outlook for our businesses remains very strong. We'll provide further updates on 2022 during our January earnings call. I'll turn it back over to John now for some closing comments. We just completed a challenging quarter and expect those challenges to remain for the next few quarters. However, we believe we're taking the right actions as we manage through this period to position ourselves for success as supply chains improve. We also won significant programs in 2021 and are committed to driving long-term profitable growth as we innovate, serve, and advance the company. Before I turn it back over to Pat for Q&A, I want to thank all 15,000 Oshkosh team members for the hard work and sacrifice they go through every single day to help our company be successful. Okay, Pat, back to you. Thanks, John. I'd like to remind everybody, please limit your questions to one plus a follow-up, and we need to be disciplined on the follow-up question. Afterwards, so we ask that you get back in queue if you'd like to ask additional questions. Operator, please begin the question and answer period of this call. Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the queue. You may press star two if you would like to remove your line from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Our first question is from Felix Boeschen with Raymond James. Please proceed. Hey, good morning, everybody. Morning. Morning. Hey, just curious if you could talk about maybe directionally how you think the new fiscal year shapes out from a price cost perspective over time. I know you said $75 million-$85 million headwind this stub and then price cost parity by the end of 2Q. Just wondering if we think that $85 million headwind gets slightly better by quarter as sort of pricing flows in or just generally how much visibility you have there given the large backlog and clearly still some supply chain issues. Sure. Thanks, Felix. I can take that one. First of all, just to level set, everything that we're currently booking in North America has double-digit price increases in it since the beginning of 2021. I think that's just a good backdrop as we think about the backlog. From a quarterly cadence, you're correct. We see about $75 million-$85 million in the stub period. As we look to the first quarter, expecting similar levels to that based on the backlog, we do see in the second quarter that starts getting meaningfully better. You should start seeing our margins start normalizing. Then as we said, by the second quarter, we should be largely price-cost neutral. By the end of the second quarter. Excuse me, by the third quarter, we should be largely price cost neutral. Yeah. Okay. That's helpful. John or Mike, I'm not sure who this is best for, but the model is throwing off obviously substantial amount of free cash and cash has grown on the balance sheet. I know you guys have talked about M&A in the past as a focal point. Maybe just curious if you could touch on that environment and how you would think about uses of cash or the right amount of cash on the balance sheet outside of M&A going forward. I'll leave it there. Yeah. This is John, Felix. I'll talk about that 'cause we're pretty focused on our capital plan, and we do have a lot of cash on our balance sheet, and we've generated a lot of cash. You know, we're always gonna be returning cash to shareholders. I've talked a little bit about share buybacks and increasing our dividend. But we're also making investments organically in terms of technologies and new product developments and how we grow the business over time. And we've got a constant pipeline of inorganic moves that we're always looking at, but we're very prudent about how we look at those moves. We know exactly where we think we should be making moves. You know, you've seen us do some smaller moves. Boise Mobile was a great move, but a smaller move. We did the acquisition of Pratt Miller, which is a fantastic acquisition, a few quarters ago that's leading to a lot of really positive growth opportunities for our company. You'll continue to see us active. As you know, the M&A environment today is very frothy. We're pretty prudent about, hey, we wanna look at where we can make moves that are going to make meaningful differences to how we grow the company over time. We're careful but focused on it. I think you'll see us continue to make a few moves inorganically. Felix, one other thing I'd just add, we did step up our repurchase activity in the quarter. I would expect that to continue, perhaps even at a somewhat more robust level into the stub period. That's share buybacks as well as our increased dividend that we talked about today will also remain important parts of our capital allocation strategy. Very helpful. Thank you. Our next question is from Stanley Elliott with Stifel. Please proceed. Hey, good morning, everyone. Thank you all for taking the question. I'm curious on the EV commentary. I mean, you obviously have a lot of prototypes and units in the field across all the different segments. Are we still looking at kind of a 2023, 2024 period of commercialization? Is there an opportunity to accelerate that? I mean, you mentioned kind of a frothy M&A environment. Just curious how you think about that, given the interest levels you're seeing. Yeah. EVs is a long-term strategy for us. You know, when we look at our markets, we think that EVs will gradually be put into the market over the next 10- 20 years. There are certain segments where we're already commercializing, mostly access today, where we're commercializing things like all-electric aerial work platforms. If you look at F&E, it's more of a 2023 where you'll see much more commercialization of these EV vehicles that we put into the market recently. The U.S. Postal Service, of course, will start shipping EV vehicles in 2023, as part of that program. I think, you know, we've already started it now in some segments. I think 2023 is certainly a year where you'll see a lot more actual product being released for sale and shipment. It'll continue to gradually increase with every year that goes by for the next 10-20 years as fleets get electrified. That's good for us because this offers economic benefit to our customers. There's a lot of value created with these EVs and so it's good for us from a margin standpoint. It's great for our customers in terms of giving them a better economic solution. Great. Then in terms of the access, you mentioned North America strength. What's happening over in China? I mean, that's been a great growth market for you all. Curious what's happening, you know, if some of the things with the property markets has kind of curtailed some of the growth opportunities there. Just curious how that's shaken out. Yeah. The access equipment segment in China has slowed a bit, as China's economy has slowed a little bit. But it's still a very robust market and one of the biggest. It will be one of the biggest markets in the world. It's already the biggest construction market in the world. While it's slowed a little bit, we're still very bullish on China. We've got great operations there, incredible people there who do a great job addressing the marketplace. But it has slowed a little bit over the past year. Very good. Thanks, and best of luck. Our next question is from Jerry Revich with Goldman Sachs. Please proceed. Yes. Hi. Good morning, everyone. Morning. Can you talk about coming through and exiting this post-COVID environment? How are you thinking about potential structural changes to the supply chain or price protection that you give customers and orders going forward? Any significant changes in the business model that you're thinking through, you know, as a result of what we learned, you know, call it in the COVID and post-COVID environment so far? Yeah. Jerry, thanks for the question. We've been doing an enormous amount of heavy lifting in our supply chain capabilities. We have qualified literally hundreds of new suppliers to both dual source and or just improve our resiliency of supply because of some of the disruption that we've seen. We've looked at it not just in the short term, but more of a opportunity of let's really take a look at the supply chain and make sure that we're building it for the future. Not just looking at it for what do we need next quarter, but what do we need for the next five years as we continue to grow the business. A lot of heavy lifting, and that's why we've qualified hundreds of new suppliers. We've also done a lot of work digitally connecting our supply chain to give us more visibility than we've had in the past, so that we know where we have opportunities and we know where we have issues quicker. We've been doing a lot of re-engineering of components, which helps facilitate better supply. I talked in the opening commentary about redesigning all the chips for access, which gave us much better supply of chips. So there's a lot of heavy lifting that's been done. You know, as you look at the price cost issue that we're currently wrestling with, and you know, we talk about we will come out of this and as we get through Q2. You know, we built really fast, strong backlogs in the Access Equipment segment earlier, started earlier in 2021. As those backlogs built, we were also seeing really strong, stronger than usual, material cost inflation. When we book orders, we'd have a forecast for what material cost inflation would be, and then a month later, those forecasts were much higher than they were when we booked a bunch of backlogs the month before. That's what created the pinch that we're in right now. We are confident. If you go back in time, should we have been doing more locking than we were doing? Probably. We probably should have. As we look at it going forward, we're being much more aggressive with making sure as we are building backlog today and we're building backlog at full price today. We're very confident in what we're doing, and it's, we're protecting ourselves as we go more prudently based on what we see with material costs as we go forward. That's what gives us the confidence to say that as we get into Q2, we'll start to see nice improvement there. John, you know, on that note, as we think about, you know, the next time the demand environment accelerates like this, will you have the capability to lock in costs when orders are accelerating? Is that a function of, you know, the work you've done on qualifying and expanding the supply base, or is there expanded use of any futures or other instruments? In other words, you know, in a type of demand recovery, you know, it's pretty easy to match those two, but what about the next time we have the type of demand cycle we're looking at now? Are the systems in place to allow you to match in that type of environment? Yeah, Jerry. The work we're doing now is particularly on the cost side, you know, trying to lock in costs either with price locks or with suppliers as we see healthy order rates and backlog building. That's where we've put the most focus with regard to how we're operating. Certainly the environment we're in right now is further unique because you see the escalation, but the level of disruption, whether it's logistics or even the obtaining components, not just in our industry, but across industries, I think has certainly been a unique adder to sort of the situation that us and many other companies are facing right now. Thanks, Jerry. Appreciate the session. Thanks. Our next question is from Stephen Volkmann with Jefferies. Please proceed. Hi. Good morning, guys. Thanks for taking my question. I'm wondering if we can just go back. You talked a lot about the price cost trajectory. That was very helpful. You also talked about a lot of other sort of near-term pressures with, you know, labor availability and parts availability and productivity resulting from those. Can you just talk us through sort of like you did on price cost, how does that play out sort of in the stub period and then into 2022, do you think? Sure. Really, as we look at the stub period, while we're not providing explicit guidance, as we're talking about it qualitatively, we don't expect a meaningful change in supply chain at this point in time. We're expecting that we're gonna face those labor inefficiencies and so on that we faced in the quarter. Of course, we know the cost side of it. While we're certainly not providing guidance yet for 2022, and there are a lot of moving pieces, we do believe over time, supply chain's gonna get better in a labor situation. The exact cadence of that is not clear. You know, hopefully, as we approach that January earnings call, we'll start to have better visibility to that. I think if you look at the biggest factors that we're facing right now, it's really this cost-price dynamic. I think that's where we have visibility, and that's what gives us confidence that we should start seeing a return of normalcy to our margins as we exit the second quarter, really more so in the third quarter next year and the fourth quarter. Stephen, a little bit bigger picture. If you look at where we are in this supply chain disruption period, we've done a lot of really good work with our supply base. Our supply base has improved in its ability to keep pace with our production forecast. Now, we still have problem areas. We talked about chassis. Chassis is an example of a fundamental supply concern. But for the most part, we've had a lot of suppliers make nice improvements in their ability to produce. We still see huge challenges in the logistics side of things, not only high cost, but really the lead times and the predictability of being able to, for domestic freight, for ocean freight, and the predictability of it is one of the biggest challenges. It's really the long lead times and hard to predict lead times in terms of when we can get supply in the door. When we're running the way we're running, that becomes challenging. It becomes a little bit unpredictable. We still have a ways to go on the logistics front, but we have made improvements in the overall ability of our supply base to keep up. Okay. That's helpful. Thanks. Related to that, I saw your inventories didn't look like they were up much sequentially. I would have thought maybe you would have some partially built equipment sort of sitting around waiting for parts that could ultimately be shipped out, but maybe that's not as big a deal as I might have thought. Just anything happening there? From a concentration perspective, we're definitely seeing higher raw materials and WIP levels. Our finished goods are definitely at lower levels. I think what you're seeing is really the supply of parts in the fourth quarter certainly was not at the levels that we wanted to see, and that ultimately impacted sales. I think you're still seeing some supply chain availability dynamics reading through those inventory numbers. Thank you. Thanks, Steph. Our next question is from Mig Dobre with Baird. Please proceed. Thank you and good morning, everyone. I'm just trying to maybe put a little finer point here on understanding all the moving pieces on your price cost commentary. You know, if we're looking at the orders that you've taken into the quarter in access equipment, so a little over, call it $1.8 billion, is it fair to say that these orders are gonna convert to revenue in the second quarter of 2022 or maybe even beyond? Is this order batch that you've taken this quarter considered to be price cost neutral? Related to this, too, I'm curious as to what your cost assumptions are in this comment that you're price cost neutral. Do you actually bake in current spot prices for raw materials, or is it that you're expecting that raw materials are gonna moderate? It's kind of a lot here, but hopefully you can address it all. Yeah. First of all, speaking to the backlog, and we're not gonna break down different price levels, but we've had multiple price increases. If you look at the breakdown of our backlog, there's several price levels. Obviously, the most recent pricing actions we took were more like the middle of of the fourth quarter. There are certainly orders booked in the fourth quarter that weren't at that third price level yet. What we see, again, it very much aligns with the commentary I had before. We'll be largely shipping the backlog over the next two and a half quarters that's out there. You have obviously again, the $75 million-$85 million headwind in the stub period. That inventory's in backlog today. Likewise, in the first quarter, we should see similar levels of cost price headwind, and then it gets meaningfully better. We really start getting the benefit of those price increases as we manage through the second quarter of next year. That's why we said, really coming out of the second quarter or in the third quarter, largely back to cost price neutral. From an assumption standpoint, you know, of course, we're looking at what our current costs are, and obviously, we have much better visibility today as we work with our suppliers and understand where costs are at. We're not seeing the rapid increase of steel anymore. While it's still obviously at a very elevated level, I think the good news is we are seeing locks available in areas like hot rolled coil for meaningfully lower than what current spot rates are. That's consistent, if you look out on many of the published steel curves, it is expected to tail off, albeit still at very elevated levels, versus historically. Those are all things that we're looking at. It's not just steel, though. We're looking at all components in our pricing decisions, from labor to rubber components to aluminum to commercial or third-party chassis. We're looking at it holistically, Mig. Mig, just to emphasize, our order rates are really healthy. The market is really healthy. All of our orders recently and a healthy percent of our backlog is at our full price level. If I look at Access alone, right? All of our commercial segments have come up in double digits because of the material cost inflation. If I look at Access alone, independent rental companies, national rental companies, the order rates across are all at the price level that gets us to where we need to be in terms of that price cost equation. I see. Maybe to go back to the sort of process question that Jerry was asking earlier. I mean, look, a skeptic's view of what's going on here could be that you know, there's some flaws in the process given what's been happening this year and your performance relative to peers, right? In terms of how the order intake was managed relative to cost inflation and then also some of the disruptions that showed up maybe sooner for you than it has for others. I guess I'm wondering here, as you're sort of running an analysis looking back beyond qualifying additional suppliers, which you talked about, are there some procedural things that you think you're gonna implement going forward, so that you know, investors can gain some level of confidence that structurally, you know, you can sort of become a better business next cycle or through the cycle as these headwinds eventually dissipate? Thank you. I think the answer to your question is an emphatic absolutely yes. We are, you know, it was an unusual- Mm-hmm. period, I'd say, from March, April through where we were in, let's call it September, in terms of how fast that backlog built, along with how much cost escalation got away from everybody almost. I mean, the forecast just kept changing constantly. You thought you were okay with a certain cost level, and then the forecast would change. and we just kept seeing it escalate and escalate and escalate. Absolutely, we will learn, and we will put more specific practices in place, so that in the future, we're more protected from this type of a rapid buildup of backlog in the event that there's also a rapid cost escalation that goes with it. Yeah. When we're talking about the forecast, we're looking at really those yield curves that are published out in the marketplace. I think if you roll back the clock to the February timeframe when we're already starting to book meaningful orders, there is a view that steel is gonna be elevated for a few months and come down, which is not dissimilar to other cycles what's happened. We obviously saw a very different trajectory in this case. Those forecasts that were published that companies across the globe are looking at, obviously, that view continued to increase and push out longer. Again, I think we're definitely dealing with some unique factors that we haven't seen in other recoveries. Again, it's, you know, you look at how we managed through the pandemic, obviously delivered solid results through that. What we're dealing with right now is short-term in nature, and we certainly see light at the end of the tunnel as we exit the second quarter. Hey, Mig, I'll just emphasize, you know, this. We don't like what we're going through at all. We will learn from it. It's a few quarters of disruption for us. We are entering what we believe is a multi-year cycle in access equipment. We are completely confident in our ability as we go through a multi-year growth cycle to deliver for our customers. To deliver for our investors. We're very confident in our ability to do that in spite of this short-term issue that we're in. Thanks, Mig. Thank you for the comments. Good luck. Our next question is from Chad Dillard with Bernstein. Please proceed. Good morning, everyone. This is Brandon on for Chad. A quick question. Based on conversation in the backlog right now, what are you guys expecting in terms of customer mix next year in terms of like national rental companies versus the independent rental companies? Yeah, I can take that one. The mix, first of all, just backing up, we saw a pretty similar mix year-over-year this year, slightly more heavily weighted towards the nationals each of the last two years, so that's a bit over 50%. We expect similar mixes going forward. We don't expect a major mix shift there. Cool. One follow-up. How should we think about, for defense, the top line in 2022, and then how it goes into 2023? Can we expect to see some growth in the business in 2023 on top of the USPS stuff? Sure. As we look at 2022, as we've been saying over the last couple of years, we do expect that JLTV volumes are gonna be lower. That is gonna put downward pressure on Defense's revenues. Obviously, really, as we think of 2022, we're not gonna see much of any USPS revenue. We'll have some Medium Caliber Weapon System revenue. We'll start seeing a build of that in 2023, with it more robust in 2024, and really tied to the ramp-up of USPS, which will happen in the back half of 2023. Hey, Brandon, this is John. The way to look at our defense business, it's really a growth business. Today it's primarily tactical wheeled vehicles, and that's a great base business for us. Tactical wheeled vehicles tend to go through cycles where they're growing and then cycles where they're not growing. But there are critical enduring programs for the Department of Defense. Why do I say this is a growth business? It's a growth business because we are winning adjacent programs that are material in nature and that will drive growth from, say, the second half of 2023 or 2024 onward. It's programs like the MCWS program and more importantly, the United States Postal Service program. These are big programs driving growth, and we're competing for a lot more. Having this business where we got this base of tactical wheeled vehicles that we know how to execute on, plus adding incremental program wins, that drives a growth business over the next three-five years. Great. Thank you all. Thanks. Our final question is from Tim Thein with Citigroup. Please proceed. Oh, great. Thank you. Mike, good reminder earlier in terms of the LIFO accounting. I certainly think that's at least plays some role in the difference in terms of some of the near term performance versus peers. Just the question, John, just to continue along that last train of thought in terms of the growth prospects for defense. How do you or how should we think about that in the context of some of the recent press reports about, you know, potentially some larger cuts to JLTV volumes? I'm sure there's a timing aspect to that, but maybe you can just kind of update us on your thoughts there. Thank you. Here, here's how I think about JLTV. You know, the recent presidential budgets would indicate that 2022 volumes will be down. Mm-hmm. 2023 will likely be down. These programs go through their ups and downs. The thing that we always focus on is the U.S. Army's acquisition objective still is about 50,000 vehicles. I think it's precisely 49,900 vehicles. The U.S. Marines went from 5,000 and increased it all the way up to 15,000 or 16,000 units. Now, to date, we've shipped about 13,500 units. You can see in terms of the long-term objective for the U.S. Army and the U.S. Marines, the two biggest customers, we still have a long way to run with these programs. These programs for JLTV, this JLTV program will go well into the 2040s, beyond 2040. That's why I say this is a great base business. Now, there's gonna be up years, and there's gonna be down years based on presidential budgets and priorities and so forth and what's happening around the world. These are fundamental programs for the U.S. Army and the U.S. Marine Corps to operate. So it's great base business, and then we build on top of that some of these other program wins that we're getting. And that's why our defense business is a really nice growth platform for us as a company. We focused on the U.S. Army's acquisition objective long term, that 50,000 units and the U.S. Marine Corps acquisition objective. That's what we focus on, knowing that there'll be ups and downs from year to year. Got it. Okay. In the interest of time, I'll just leave it there. Thank you. Thanks, Tim. We have reached the end of our question and answer session. I would like to turn the conference back over to management for closing remarks. Wanna thank everybody for joining us today. Appreciate your interest in Oshkosh Corporation, and wish everyone a safe and healthy next quarter. Thank you. This does conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.