# FORM 10-KUNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

_________________

|[X] | ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT                OF
1934 For the fiscal year ended December 31, 2005         OR
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|[_] | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF
1934 For the Transition period from __ to __
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

Commission file number
0-18110

Gehl Company
                                       (Exact name of registrant as specified in its
charter)

|                                                               |                                     
|-------------------------------------------------------------- | ------------------------------------
|Wisconsin                                                      | 39-0300430                          
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)
|143 Water Street, West Bend, WI                                | 53095                               
|(Address of principal executive office)                        | (Zip Code)                          

Registrants
telephone number, including area code (262) 334-9461

Securities registered
pursuant to Section 12(b) of the Act:
                                                                NONE

Securities registered
pursuant to Section 12(g) of the Act:

Common Stock, $.10 par value                                                                 (Title of class)

Rights to Purchase
Preferred Shares                                                                 (Title
of class)

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405
of the Securities Act.

| | Yes     No  X
| | -------------

Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or
Section 15(d) of the Act.

| | Yes     No  X
| | -------------

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.

| | Yes  X   No
| | -----------

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is
not contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K   [X]

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer or
a non-accelerated filer. See definition of accelerated filer and large accelerated
filer in Rule 12b-2 of the Exchange Act. (check one):    Large accelerated
filer     Accelerated filer X    Non-accelerated filer

Aggregate
market value of voting and non-voting common equity held by non-affiliates of the
registrant: $312,588,861 at February 7, 2006.

Number
of shares outstanding of each of the registrants classes of common stock, as of
February 7, 2006:

|                             |                  
|---------------------------- | -----------------
|Class                        | Shares Oustanding
|Common Stock, $.10 Par Value | 12,009,527       

DOCUMENTS INCORPORATED
BY REFERENCE

Gehl Company Proxy
Statement for the 2006 Annual Meeting of Shareholders (to be filed with the Commission
under Regulation 14A within 120 days after the end of the  registrants fiscal year
end and, upon such filing, to be incorporated by reference into Part III)

---

# GEHL COMPANY

_________________

# INDEX TOANNUAL REPORT
ON FORM 10-K  For The Year Ended December 31, 2005

|Part I   |                                                                    | Page
|-------- | ------------------------------------------------------------------ | ----
|Item 1   | Business                                                           | 1   
|Item 1A  | Risk Factors                                                       | 8   
|Item 1B  | Unresolved Staff Comments                                          | 11  
|Item 2   | Properties                                                         | 12  
|Item 3   | Legal Proceedings                                                  | 12  
|Item 4   | Submission of Matters to a Vote of Security Holders                | 12  
|         | Executive Officers of the Registrant                               | 12  
|Part II 
|Item 5   | Market for Registrants Common Equity, Related Shareholder        
|         | Matters and Issuer Purchases of Equity Securities                  | 14  
|Item 6   | Selected Financial Data                                            | 15  
|Item 7   | Managements Discussion and Analysis of Financial                 
|         | Condition and Results of Operations                                | 16  
|Item 7A  | Quantitative and Qualitative Disclosures About Market Risk         | 26  
|Item 8   | Financial Statements and Supplementary Data                        | 27  
|Item 9   | Changes in and Disagreements with Accountants                     
|         | on Accounting and Financial Disclosure                             | 57  
|Item 9A  | Controls and Procedures                                            | 57  
|Item 9B  | Other Information                                                  | 57  
|Part III
|Item 10  | Directors and Executive Officers of the Registrant                 | 57  
|Item 11  | Executive Compensation                                             | 58  
|Item 12  | Security Ownership of Certain Beneficial Owners and Management and
|         | Related Shareholder Matters                                        | 58  
|Item 13  | Certain Relationships and Related Transactions                     | 58  
|Item 14  | Principal Accountant Fees and Services                             | 58  
|Part IV 
|Item 15  | Exhibits and Financial Statement Schedules                         | 59  
|         | Signatures                                                         | 59  

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# PART I

# Special Note Regarding
Forward-Looking Statements

Gehl
Company (the Company or Gehl) intends that certain matters
discussed in the Annual Report on Form 10-K are forward-looking statements
intended to qualify for the safe harbor from liability established by the Private
Securities Litigation Reform Act of 1995. All statements other than statements of
historical fact are forward-looking statements. When used in this Annual Report on Form
10-K, words such as the Company believes, anticipates,
expects, estimates or projects or words of similar
meaning are generally intended to identify forward-looking statements. These
forward-looking statements are not guarantees of future performance and are subject to
certain risks, uncertainties, assumptions and other factors, some of which are beyond the
Companys control, that could cause actual results to differ materially from those
anticipated as of the date of this Annual Report on Form 10-K. Factors that could cause
such a variance include, but are not limited to, those described under Risk
Factors, included in Item 1A, and the following: any adverse change in general
economic conditions, unanticipated changes in capital market conditions, the
Companys ability to implement successfully its strategic initiatives, disruptions in
production capacity, excess inventory levels, the effect of changes in laws and
regulations (including government subsidies and international trade regulations),
technological difficulties, changes in currency exchange rates or interest rates, the
Companys ability to secure sources of liquidity necessary to fund its operations,
the Companys ability to implement a new asset securitization program, the impact of
any strategic or capital markets transactions effected by the Company, and employee and
labor relations. Shareholders, potential investors, and other readers are urged to
consider these factors in evaluating the forward-looking statements and are cautioned not
to place undue reliance on such forward-looking statements. The forward-looking statements
included in this filing are only made as of the date of this Annual Report on Form 10-K,
and the Company undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances. In addition, the Companys
expectations for fiscal year 2006 are based, in part, on certain assumptions made by the
Company, including those relating to commodities prices, which are strongly affected by
weather and other factors and can fluctuate significantly, housing starts and other
construction activities, which are sensitive to, among other things, interest rates and
government spending, and the performance of the U.S. economy generally. The accuracy of
these or other assumptions could have a material effect on the Companys ability to
achieve its expectations.

# Item 1. Business

# Overview

The
Company is a leader in the design, manufacture and distribution of compact equipment for
construction and agriculture applications. Its compact equipment and related attachments
are primarily used in a variety of earthmoving and material handling applications where
space, mobility and manpower are at a premium. The Company also manufactures agricultural
implements and provides financing for its dealers and their customers. The Company
believes its products are recognized as providing quality, reliability and performance to
a loyal and growing customer base. It also believes it is differentiated from other
construction equipment manufacturers by its focus on the growing compact equipment market,
its extensive compact equipment-focused distribution network, and its ability to offer a
broad line of high-quality compact equipment to a wide variety of customers. The Company
was founded in 1859 and was incorporated in the State of Wisconsin in 1890.

The
Company believes that it has one of the most extensive compact equipment-focused product
offerings in North America. Its compact equipment consists of skid loaders, telescopic
handlers, compact excavators, compact track loaders, all-wheel-steer loaders, compact
mini-loaders and asphalt pavers. The Company also provides an assortment of related
attachments, including pallet forks, augers and backhoes, primarily for skid loaders. Its
agricultural implements encompass a broad range of products including haymaking, forage
harvesting, manure handling and feedmaking equipment. While the Company manufactures a
majority of the products it sells, it has also proactively established strategic alliances
with select European and Asian compact equipment manufacturers to distribute their
products under its brand names. These alliances further broaden the Companys product
offering and leverage its distribution network.

1

---

The
Company markets its products under the Gehl, Mustang and Edge brand names through its
network of independent dealers located primarily in North America and Europe. The
Companys dealers, which number in excess of 660 in North America along with
approximately 120 distributors in the rest of the world, sell its compact equipment and
attachments to contractors, sub-contractors, owner operators, rental stores, farmers,
landscapers and municipalities. Many of these dealers also operate their own rental fleet.
Over time, the Company has cultivated and built what it considers to be one of the largest
independent compact equipment distribution networks in North America. Most of the
Companys largest competitors require their dealers to carry their full line of large
and small equipment which may not be ideally suited for that dealers local market
and customer base. The Company attempts to differentiate itself by offering dealers a
comprehensive compact equipment offering and allowing them to carry only the products
which optimize their overall product portfolio for their individual served market. It also
supports its dealer network by providing floor plan, retail and rental fleet financing. It
believes the combination of its product offering and financing support provides a
significant opportunity to continue to expand sales to existing dealers and attract
additional dealers in new geographic regions.

The
Company manufactures its products at three facilities located in Yankton and Madison,
South Dakota and West Bend, Wisconsin, and it has selling and distribution facilities in
Illinois, Minnesota, Wisconsin and Germany. Under a license agreement with Manitou BF
S.A., the worlds largest manufacturer of telescopic handlers, the Company has the
rights to manufacture and distribute select models of Manitou telescopic handlers under
the Gehl brand name for sale in the United States.

# Sale of Common Stock and
Stock Split

On
September 26, 2005, the Company completed a public offering of 2,395,000 shares of its
common stock at a price to the public of $28.12. The offering included 1,748,125 primary
shares sold by the Company and 646,875 secondary shares sold by one selling shareholder,
Neuson Finance GmbH. The Company received approximately $46.1 million in net proceeds from
the sale of shares by it in the offering, after deducting underwriting discounts,
commissions and expenses. The Company used the net proceeds it received from the offering
to repay debt outstanding under its credit facility.

On
July 22, 2005, the Company declared a three-for-two common stock split in the form of a
50% stock dividend with a record date of August 10, 2005, and a payment date of August 24,
2005. The purpose of the stock dividend was to create additional market liquidity for the
Companys common stock and, thus, enhance shareholder value. The information in this
Annual Report on Form 10-K has been adjusted to reflect the stock split.

# Business Segments

The
Company operates in two segments, construction equipment and agricultural equipment,
defined by the two distribution channels through which its products are sold as the
long-term financial performance of these segments is affected by separate economic
conditions and cycles. Many of the Companys compact construction equipment products
are sold through both of these channels. A substantial portion of the products sold
through the agricultural equipment channel represent compact equipment and related
attachments. In 2005, sales of agricultural implement products represented approximately
8% of the Companys consolidated net sales.

2

---

The following table shows certain
information relating to the Companys segments (dollars in thousands):

|                      
|----------------------
|2004                  
|%                     
|Net sales:            
|Construction Equipment
|Agricultural Equipment
|                      
|Total                 
|                      
|Income (loss) from    
|operations:           
|Construction Equipment
|Agricultural Equipment
|                      
|Total                 
|                      

The
2003 income from operations reflects the impact of the $3.6 million impairment charge to
adjust the carrying value of the Companys Owatonna, Minnesota and Lebanon,
Pennsylvania facilities, which were closed in 2002 and sold in 2003 and 2004,
respectively. Of the $3.6 million charge, $1.2 million and $2.4 million related to the
construction equipment and agricultural equipment segments, respectively.

The
Company had no intersegment sales or transfers during the years set forth above. For
segment information with respect to identifiable assets, depreciation/amortization and
capital expenditures for the construction equipment and agricultural equipment segments,
see Note 16 of Notes to Consolidated Financial Statements included in Part II,
Item 8 of this Form 10-K.

# Construction Equipment
Segment

Products

The
Company markets the following products through compact construction equipment dealers:

| |  | Skid
Loaders  The Companys skid loader line consists of a broad range of products
offered through the Gehl and Mustang brands, including a model with the largest lift
capacity and highest lift height in the industry. The skid loader line features a choice
of hand-operated T-bar or joystick controls, hand only or hand and foot controls. The
skid loader, with its fixed-wheel four-wheel drive is used for a variety of purposes,
including earth moving and material handling duties. The skid loader may also be used
with a variety of attachments.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Telescopic
Handlers  The Companys telescopic handler line consists of a broad range of
products offered through the Gehl and Mustang brands. These telescopic handlers are
designed to handle heavy loads (up to 12,000 pounds) reaching horizontally and vertically
(up to 55 ft.) for use by a variety of customers, including masons, roofers and building
contractors.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Compact
Excavators  The Companys compact excavator line consists of a broad range of
products offered through the Gehl and Mustang brands. The units range in size from 1.5
metric tons to 11.5 metric tons. All units come standard with auxiliary hydraulics. An
industry exclusive frame leveling system is offered on a number of models. These units
can be equipped with a wide variety of attachments.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3

---

| |  | Compact
Track Loaders  The Company offers multiple compact track loaders through the Gehl
and Mustang brands. With a dedicated rubber track, these machines are especially useful
in soft or muddy conditions. They offer low ground pressure and high floatation and are
used in landscaping, nursery and general construction applications.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | All-wheel-steer
Loaders  The Company offers multiple all-wheel-steer loaders through the Gehl and
Mustang brands with either conventional or telescopic booms. The units range from 39
horsepower to 75 horsepower and are used in general construction, and by building
contractors and material producers.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Asphalt
Pavers  Two models of Power Box pavers are marketed by Gehl. These pavers allow
variable paving widths from 4 1/2 to 13 feet and are used for both commercial and
municipal jobs such as county and municipal road, sidewalk, golf cart path, jogging and
bike trail, parking lot, driveway, trailer court and tennis court paving.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Compact
mini-loaders  Gehl offers an articulated unit, powered by a 20 horsepower engine.
It is one of the few compact-loaders offered in the industry where the operator is seated
on the unit. Offered with a wide variety of attachments, the principal applications for
this product are landscaping, nursery and material handling.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Through
its wholly-owned subsidiary, CE Attachments, Inc., the Company distributes a wide variety
of attachments primarily for use in conjunction with skid loaders and compact excavators.
These attachments include dirt, snow and cement buckets, pallet forks and
hydraulically-operated devices such as cold planers, backhoes, brooms, trenchers, snow
blowers, industrial grapples, tree diggers, concrete breakers, augers and many others.

Marketing and Distribution

The
Company maintains a separate distribution system for construction equipment. The Company
markets its construction equipment in North America through approximately 315 independent
dealers and internationally through approximately 100 distributors. The Company markets
its compact construction attachments through its dealer network as well as through
non-Gehl dealers, catalogs and its CE Attachments, Inc. website. The top ten dealers and
distributors of construction equipment accounted for approximately 21% of the
Companys consolidated net sales for the year ended December 31, 2005; however, no
single dealer or distributor accounted for more than 7% of the Companys consolidated
net sales for that period. Sales of the construction equipment skid loader product line
accounted for approximately 27%, 26% and 25% of the Companys consolidated net sales
in 2005, 2004 and 2003, respectively. Sales of the construction equipment telescopic
handler product line accounted for approximately 21%, 17% and 14% of the Companys
consolidated net sales in 2005, 2004 and 2003, respectively.

The
Company believes that maintenance and expansion of its dealer network is important to its
ongoing success in the compact construction equipment market. Various forms of support are
provided for its construction equipment dealers, including sales and service training,
and, in the United States and Canada, floor plan financing for its dealers and retail
financing for both its dealers and their customers. The construction equipment dealers in
North America are also supported by district sales managers who provide a variety of
services, including training, market evaluation, business planning, equipment
demonstrations and sales, and regional field service representatives who assist in
training and provide routine dealer service support functions, including warranty and
service assistance. The Company has a service agreement with a vendor for a centralized
parts distribution center located in Belvidere, Illinois.

4

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Industry and Competition

The
Company operates principally in the global compact construction equipment industry. Its
equipment is primarily used for earth moving, material handling and paving applications,
particularly in projects where space, mobility and manpower are at a premium. Sales in
this market are driven by activity in the residential, commercial and industrial
construction, recycling and paving industries. The market for compact construction
equipment is particularly dependent on the level of light construction and repair projects
such as residential and light commercial building, landscaping and recycling. Job
mechanization continues to drive demand in the compact construction market as construction
providers look to replace costly manual labor with compact, affordable, multi-purpose
machines.

The
Company primarily focuses on seven compact construction equipment product categories: skid
loaders, telescopic handlers, compact excavators, compact track loaders, all-wheel-steer
loaders, asphalt pavers and compact mini-loaders. It also provides an assortment of
related attachments, including pallet forks, augers and backhoes, primarily for skid
loaders. The Company competes with numerous companies in each of its served markets,
primarily based on price, quality, service and distribution. Its construction equipment
product lines face competition in each of the Companys markets. In general, each
line competes with a small group of seven to twelve different companies, some of which are
larger than the Company.

The
primary markets for the Companys construction equipment outside of North America are
in Europe, Australia, Latin America, the Middle East and the Pacific Rim. The Company
believes it is a significant competitor in the skid loader market in most of these
markets.

# Agricultural Equipment
Segment

Products

The
Company markets the following products through agricultural equipment dealers:

| |  | Material
Handling  This line consists of a broad range of Gehl skid loaders, telescopic
handlers, compact excavators, compact track loaders, all-wheel-steer loaders and the
compact mini-loader used for agricultural applications. These product lines, which are
also sold through the Companys construction equipment dealers, are marketed by
dealers who also sell agricultural implements. The Company also sells a range of
attachments to accompany some of these products.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Implements
 The Company offers haymaking, forage harvesting, manure handling and feedmaking
implements. Its haymaking line includes a broad range of products used to harvest and
process hay crops for livestock feed. The Company offers disc mowers, a wide range of
pull-type disc mower conditioners, hay rakes, windrow mergers and variable-chamber round
balers. The Company believes that it currently manufactures and distributes one of the
industrys most complete lines of forage harvesting equipment, including forage
harvesters, forage wagons and blowers. The Company offers a broad range of manure
spreaders, including the Scavenger V-Tank side-discharge manure spreader
which incorporates a hydraulically controlled auger allowing the spreader to handle a
wide range of semi-liquid waste products, including municipal sludge. For handling mostly
solid manure, the Company also markets several models of rear-discharge box spreaders.
The Company offers the Gehl Mix-All line of grinder-mixers and a feeder wagon for both
mixing feed rations and delivering feed to livestock feeders.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Marketing and Distribution

In
North America, Gehls agricultural equipment is sold through approximately 350
geographically dispersed dealers. Fifty of these dealers are located in Canada.
Agricultural equipment is also marketed through approximately 15 distributors in Europe,
the Middle East, the Pacific Rim and Latin America. It has been and remains the
Companys objective to increase the share of Gehl products sold by a Gehl dealer.
Gehl is not dependent for its sales on any specific agriculture dealer or group of
dealers. The top ten dealers and distributors in agricultural equipment accounted for
approximately 5% of the Companys consolidated net sales for the year ended December
31, 2005 and no one dealer or distributor accounted for over 1% of the Companys
consolidated net sales during that period. Sales of the agricultural equipment skid loader
product line accounted for approximately 12%, 13% and 13% of the Companys
consolidated net sales in 2005, 2004 and 2003, respectively.

5

---

The
Company provides various forms of support for its dealer network, including sales and
service training. The Company also provides floor plan and retail finance support for
products sold by its dealers in the United States and Canada. The Companys
agricultural equipment dealers in North America are also supported by district sales
managers who provide a variety of services, including training, market evaluation,
business planning, equipment demonstrations and sales, and regional field service
representatives who assist in training and providing routine dealer service support
functions, including warranty and service assistance. The Company has a service agreement
with a vendor for a centralized parts distribution center located in Belvidere, Illinois.

Industry and Competition

The
agricultural equipment industry has seen significant consolidation and retrenchment since
1980. This has served to reduce the total number of competitors, to strengthen certain
major competitors, and to reduce the strength of certain other companies in the industry.
The Company competes within the agricultural equipment industry based primarily on
products sold, price, quality, service and distribution.

The
agricultural equipment markets in North America are highly competitive and require
substantial capital outlays. The Company has several major competitors as well as numerous
other limited line manufacturers and importers. The largest manufacturers in the
agricultural equipment industry generally produce tractors and combines as well as a full
line of tillage and planting equipment. Such manufacturers also market, to varying
degrees, haymaking, forage harvesting, material handling, manure handling and/or
feedmaking equipment, the areas in which the Companys agricultural products are
concentrated. The Company believes that no single competitor competes with the Company in
each of its product lines and the Company is the only non-tractor manufacturer in the
industry that offers equipment in each of these product lines. Smaller manufacturers which
compete with the Company produce only a limited line of specialty items and often compete
only in regional markets.

The
majority of the Companys agricultural equipment dealers also carry the tractor and
combine product lines of a major manufacturer. In addition to selling the tractors and
combines of a major manufacturer, many of these dealers carry the major
manufacturers entire line of products, some of which directly compete with the
products offered by Gehl. Dealers of Gehls agricultural equipment also market
equipment manufactured by limited line manufacturers which compete with specific product
lines offered by the Company.

The
primary markets for Gehls agricultural equipment outside of North America are in
Europe and the Pacific Rim. In these markets, the Company competes with both agricultural
equipment manufacturers from the United States, some of which have manufacturing
facilities in foreign countries, and foreign manufacturers. The Company does not believe,
however, that it is presently a significant competitor in any of these foreign markets.

# Backlog

The
backlog of unfilled equipment orders (which orders are subject to cancellation in certain
circumstances) as of December 31, 2005 was $186.3 million versus $65.3 million at December
31, 2004. Virtually all orders in the backlog at December 31, 2005 are expected to be
shipped in 2006.

# Floor Plan and Retail
Financing

Floor Plan Financing

The
Company, as is typical in its industries, generally provides floor plan financing for its
dealers. Products shipped to dealers under the Companys floor plan financing program
are recorded by the Company as sales and the dealers obligations to the Company are
reflected as accounts receivable.

The
Company provides interest-free floor plan financing to its dealers, for construction
equipment for varying periods of time generally up to six months and for agriculture
equipment generally up to nine months. Dealers who sell products utilizing floor plan
financing are required to make immediate payment for those products to the Company upon
sale or delivery to the retail customer. At the end of the interest-free period, if the
equipment remains unsold to retail customers, the Company generally charges interest to
the dealer at approximately 3% above the prime rate or, on occasion, provides an
interest-free extension of up to three months upon payment by the dealer of a curtailment
of 25% of the original invoice price to the dealer. This type of floor plan equipment
financing accounts for approximately 81% of Gehls dealer accounts receivable, with
all such floor planned receivables required to be secured by a first priority security
interest in the equipment sold.

6

---

Retail Financing

The
Company also provides retail financing primarily to facilitate the sale of equipment to
end users. Additionally, a number of dealers purchase equipment which is held for rental
to the public. The Company also provides retail financing to such dealers in connection
with these purchases. Retail financing in the United States is provided by the Company
primarily through Gehl Finance, the Companys finance division. Retail financing is
provided in Canada by a third party at rates subsidized by the Company.

The
Company maintains arrangements with third parties pursuant to which the Company sells
retail finance contracts through an asset securitization program and limited recourse
arrangements. The finance contracts require periodic installments of principal and
interest over periods of up to 66 months; interest rates are based on market conditions.
The majority of these contracts have maturities of 12 to 60 months. The Company continues
to service the finance contracts it sells, including cash collections. For additional
discussion, see Managements Discussion and Analysis of Financial Condition and
Results of Operations  Liquidity and Capital Resources  Off-Balance Sheet
Arrangements  Sales of Finance Contracts Receivable, included in Part II, Item
7 of this Form 10-K and Note 3 of Notes to Consolidated Financial Statements,
included in Part II, Item 8 of this Form 10-K.

# Employees

As
of December 31, 2005, the Company had 982 employees, of which 618 were hourly employees
and 364 were salaried employees. At the production facilities in West Bend, Wisconsin, one
of three Gehl production facilities, 102 hourly employees are covered by a collective
bargaining agreement with the United Steelworkers Union (formerly the United Paperworkers
International Union and formerly P.A.C.E) which expires December 15, 2006. None of the
remaining employees of the Company are represented by unions. There have been no
labor-related work stoppages at the Companys facilities during the past thirty-two
years.

# Manufacturing and
Sourcing

The
Company manufactures its products at three efficient and flexible manufacturing facilities
located in South Dakota and Wisconsin. In 2002, the Company successfully completed a plant
rationalization that consolidated its manufacturing facilities from five locations into
three and improved its operating margins significantly. In addition, in 2005, the Company
completed a consolidation and re-layout of its West Bend, Wisconsin facility, and the
Company completed an expansion of its Yankton, South Dakota facility, increasing this
facilitys size by 53,200 square feet. The Company has further enhanced its
manufacturing capabilities through significant investments in laser cutting, robotic
welding and other metal forming technologies. The Company believes its ongoing investment
in operational efficiency enhances its competitive cost position and operating margins.

The
Company has established key strategic relationships with leading compact equipment
manufacturers to market their products through the Companys distribution network
under the Gehl and Mustang brands. In July 2004, the Company announced a strategic
alliance with the French company Manitou BF S.A. to manufacture and distribute select
models of its market-leading compact telescopic handlers in the United States. In 1999,
the Company entered into a distribution arrangement covering North and South America with
Neuson Kramer Baumaschinen AG, an Austrian and German manufacturer of compact excavators
and all-wheel-steer loaders. The Company also has a strategic alliance with Takeuchi Mfg.
Co., Ltd. based in Japan to distribute compact track loaders in North and South America.
In addition, many of the products in the Companys wide assortment of attachments are
sourced from other leading manufacturers. The Company has actively expanded its attachment
offering in response to the growing demand for product versatility. The Company
periodically assesses its sourcing relationships and believes these relationships allow
the Company to capitalize on its partners expertise to provide a broad offering of
top-quality compact equipment and attachments.

7

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# Research and Development

The
Company attempts to maintain and strengthen its market position through internal new
product development and incremental improvements to existing products. The Companys
research and development is devoted to developing new products that meet specific customer
needs and to devising incremental improvements to existing products. Research and
development performed by the Company includes the designing and testing of new and
improved products as well as the fabrication of prototypes. The Company expended
approximately $2.6 million, $2.5 million and $2.6 million on research and development for
the years ended December 31, 2005, 2004 and 2003, respectively.

# Patents and Trademarks

The
Company possesses rights under a number of domestic and foreign patents and trademarks
relating to its products and business. While the Company considers the patents, trademarks
and service marks important in the operation of its business, including Gehl®, Gehl
Finance®, Mustang®, ADVANTAGE, Crop Processor, Dynalift®,
EDGE®, Gehl Mix-All®, Hydraloc, Powerbox®, Powerview®, Power
Protection Plan®, Select-A-Boom and the group of patents relating to the
Scavenger® manure spreader, the business of the Company is not dependent, in any
material respect, on any single patent or trademark or group of patents or trademarks.

# Available Information

The
Companys filings with the Securities and Exchange Commission (SEC), including annual
reports on Form 10-K, quarterly reports on Form 10-Q, definitive proxy statements on
Schedule 14A, current reports on Form 8-K, and any amendments to those reports filed
pursuant to Section 13 or 15(d) of the Exchange Act, are made available free of charge
through the Corporate Governance section of the Companys Internet website at
www.gehl.com as soon as reasonably practicable after the Company electronically
files such material with, or furnishes it to, the SEC. Copies of any materials the Company
files with the SEC can also be obtained free of charge through the SECs website at
www.sec.gov, at the SEC s Public Reference Room at 100 F Street, N.E., Washington,
D.C. 20549, or by calling the SEC s Public Reference Room at 1-800-732-0330. The Company
also makes available, free of charge, its Ethics Policy, Corporate Governance Guidelines,
committee charters and other information related to the Company on the Companys
Internet website or in printed form upon request.

# Item 1A. Risk Factors

You
should carefully consider each of the risks described below, together with all of the
other information contained in this Annual Report on Form 10-K, before making an
investment decision with respect to our securities. If any of the following risks develop
into actual events, our business, financial condition or results from operations could be
materially and adversely affected and you may lose all or part of your investment.

# We operate in cyclical
industries, which could adversely affect our growth and results of operations.

Our
business depends upon general activity levels in the construction and agricultural
industries. Historically, these industries have been cyclical. As a result, our operating
profits are susceptible to a number of industry-specific factors, including:

| |  | prevailing
levels of construction, especially housing starts, and levels of industrial production;
| | - | --------------------------------------------------------------------------------------------------

| |  | public
spending on infrastructure;
| | - | ----------------------------------

| |  | market
interest rates;
| | - | ----------------------

| |  | volatility
of sales to rental companies;
| | - | ----------------------------------------

| |  | real
estate values;
| | - | -------------------

| |  | consumer
confidence;
| | - | --------------------

8

---

| |  | changes
in farm income and farmland value;
| | - | ------------------------------------------

| |  | the
level of worldwide farm output and demand for farm products;
| | - | ----------------------------------------------------------------

| |  | commodity
prices;
| | - | -----------------

| |  | energy
prices;
| | - | --------------

| |  | government
agricultural policies and subsidies;
| | - | -----------------------------------------------

| |  | animal
diseases and crop pests;
| | - | -------------------------------

| |  | limits
on agricultural imports; and
| | - | -----------------------------------

| |  | weather.
| | - | --------

As
a result of these and other factors, including related effects on us and our
customers access to and cost of credit and dealer inventory management, a downturn
in demand for our products can occur suddenly, resulting in excess inventories,
under-utilized production capacity and reduced sales prices for our products. These
downturns may be prolonged and may result in lower net sales and earnings. Equipment
manufacturers, including us, have responded to downturns in the past by reducing
production and discounting product prices. These actions have resulted in restructuring
charges and lower earnings for us in past affected periods. In the event of future
downturns, we may take similar actions.

# Our dependence on, and
the price and availability of, raw materials and component parts may adversely affect our
profits.

We
are exposed to fluctuations in market prices for commodities, such as steel and rubber, as
well as component parts, including engines. In recent years, the prices of various raw
materials and component parts have increased significantly, and we have been unable to
avoid exposure to global price fluctuations and supply limitations, such as occurred in
2004 and 2005 with the cost and availability of steel and related products. If we are
unable to purchase the raw materials and components we require or are unable to pass on
price increases to our customers, our future profitability may be adversely affected.

# The industries in which
we operate are competitive, and competitors offerings of new products or services
or lower prices could result in a decrease in our net sales and earnings.

The
compact construction equipment industry is competitive. We compete with global full-line
suppliers (including Caterpillar Inc., Case Construction Equipment and Komatsu Ltd.) with
a presence in every market and a broad range of products as well as with product line
specialists (including JLG Industries, Inc., Ingersoll-Rand Company (Bobcat) and Takeuchi
Mfg. Co. Ltd.). The agricultural equipment and implement industry is also competitive and
has experienced significant consolidation and retrenchment over the past twenty years.
This has served to reduce the total number of competitors and to strengthen certain major
competitors. We have several major competitors in the agricultural industry (including
Deere & Company, AGCO Corporation and CNH Global) as well as numerous other limited
line manufacturers and importers (including Vermeer Manufacturing Company, Kuhn Group and
H&S Manufacturing Company). The largest manufacturers in the agricultural equipment
industry generally produce tractors and combines as well as a full line of tillage and
planting equipment. Some of our competitors in both the construction and agricultural
industries are larger than us and have greater financial, manufacturing, marketing and
distribution resources. Competitive pricing, product initiatives and other actions taken
by our competitors could cause us to lose customers or force us to decrease our sales
prices, resulting in lower net sales and earnings.

9

---

# We source some of our
products from third parties and any interruption in the supply of these products could
adversely affect our net sales and profitability.

We
source some of our products from third-party suppliers, including compact excavators and
compact track loaders, as well as contract with other third parties for the manufacture of
other products, including manure spreaders and forage boxes. Any interruption in the
supply of these products or any material increase in prices could adversely affect our net
sales and profitability. We source certain products from foreign suppliers, which exposes
us to foreign currency risk with respect to the prices of those products. Any material
change in the value of the United States dollar versus other currencies could adversely
impact our net sales and profitability.

# Our success depends in
part on the introduction of new products, and the failure to introduce new products on a
timely basis could adversely affect our net sales and profitability.

Our
long-term results depend upon our ability to secure, introduce and market new products
successfully. Our success in this area will depend on a number of factors, including our
ability to develop new products internally or source new products from third-party
suppliers, product quality, competition, customer acceptance of new products and the
strength of our dealer networks. Any difficulties in developing or identifying and
sourcing new products, any manufacturing delays or problems with new product launches, or
any increased warranty costs from new products could adversely affect our operating
results. The introduction of new products could also result in a decrease in revenues from
our existing products. The internal development and refinement of products also consumes a
substantial amount of capital. We may need more capital for product development and
refinement than is available to us, which could adversely affect our net sales and
profitability.

# Cyclical and structural
declines in the demand for products we offer may cause us to undertake product line and
facility rationalization initiatives that could result in restructuring charges and lower
net sales and earnings.

The
construction and agricultural industries are continually evolving and undergoing cyclical
and structural changes that impact the demand for the products we offer. The construction
equipment business in our predominant markets generally increased from 1992 to 2000 and
thereafter declined, in some cases significantly, before starting to recover in 2003.
Similarly, the agricultural equipment business in the markets we serve experienced a
period of significant decline in demand for product and industry over-capacity during the
1980s and early 1990s, which was followed by a period of consolidation and rationalization
among agricultural equipment manufacturers. The decline in product demand was consistent
with farm consolidation and the decline in the number of farms and the corresponding
increase in average farm size and machinery capacity.

We
have historically reviewed these cyclical and structural changes in demand and have taken
action to rationalize our product offerings and production facilities in light of market
conditions. We expect to continue these reviews and to take appropriate action based on
future conditions. Those actions could result in restructuring charges and lower net sales
and earnings.

# Our leverage could
adversely affect our financial health and make us vulnerable to adverse economic and
industry conditions.

At
times, we may incur indebtedness that is substantial relative to our shareholders
equity. Our indebtedness has important consequences. For example, it could:

| |  | make
it difficult for us to fulfill our obligations under our credit agreement;
| | - | -------------------------------------------------------------------------------

| |  | make
it more challenging for us to obtain additional financing to fund our business strategy,
debt service requirements, capital expenditures and working capital;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | increase
our vulnerability to interest rate changes and general adverse economic and industry
conditions;
| | - | ---------------------------------------------------------------------------------------------------------

10

---

| |  | require
us to dedicate a substantial portion of our cash flow from operations to service
indebtedness, thereby reducing the availability of cash flow to fund working capital,
capital expenditures, research and development efforts and other general corporate
activities;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | limit
our flexibility in planning for, or reacting to, changes in our business and markets; and
| | - | -----------------------------------------------------------------------------------------------

| |  | place
us at a competitive disadvantage relative to our competitors that have less debt.
| | - | ---------------------------------------------------------------------------------------

In
addition, our credit facility requires us to maintain specified financial ratios and
satisfy certain financial condition tests, which may require that we take action to reduce
our debt or to act in a manner contrary to our long-term business objectives.

# We are subject to risks
and associated changes in the business climate that could limit our access to capital.

Our
business is capital intensive and the fulfillment of our strategic plan depends, at least
in part, upon our ability to access capital at attractive rates and terms. If access to
capital becomes significantly constrained because of changes in the business climate or
other factors, then our results of operations and financial condition could be
significantly adversely affected.

# We are subject to
significant environmental, health and safety laws and regulations and related compliance
expenditures and   liabilities.

We
are subject to various laws and regulations relating to the protection of the environment
and human health and safety and have incurred and will continue to incur capital and other
expenditures to comply with these regulations. If we fail to comply with any environmental
regulations, then we could be subject to future liabilities, fines or penalties or the
suspension of production at our manufacturing facilities. If unexpected obligations at
these or other sites or more stringent environmental laws are imposed in the future, our
future profitability may be adversely affected.

# The agricultural
equipment industry is seasonal and affected by the weather, and seasonal fluctuations may
cause our results of operations and working capital to fluctuate from quarter to quarter.

The
agricultural equipment business is seasonal, because farmers traditionally purchase
agricultural equipment in the spring and fall in connection with the main planting and
harvesting seasons. Our net sales and income from operations have historically been the
highest in the second quarter, reflecting the spring selling season in our predominant
agricultural markets. Seasonal conditions also affect our construction equipment business,
but to a lesser degree.

# Item 1B. Unresolved
Staff Comments

The
Company has no unresolved staff comments to report pursuant to Item 1B.

11

---

# Item 2. Properties

The following
table sets forth certain information as of December 31, 2005, relating to the
Companys principal manufacturing facilities. See Managements Discussion
and Analysis of Financial Condition and Results of Operations  Liquidity and Capital
Resources  Capital Expenditures, included in Part II, Item 7 of this Form
10-K.

|             
|-------------
|West Bend, WI
|             
|             
|             
|Madison, SD  
|Yankton, SD  
|             

The
Company also has a 32 month renewable service agreement with a vendor for a centralized
parts distribution center located in Belvidere, Illinois. In addition, the Company has
operating leases for sales offices in Minnesota and Wisconsin and for a sales and
distribution facility in Germany.

# Item 3. Legal Proceedings

The
Company is a defendant from time to time in actions for product liability and other
matters arising out of its ordinary business operations. The Company believes that the
actions presently pending will not have a material adverse effect on its consolidated
financial position or results of operations. To the Companys knowledge, there are no
material legal proceedings to which any director, officer, affiliate or more than 5%
shareholder of the Company (or any associate of the foregoing persons) is a party adverse
to the Company or any of its subsidiaries or has a material interest adverse to the
Company or its subsidiaries.

# Item 4. Submission of
Matters to a Vote of Security Holders

No
matters were submitted to a vote of security holders during the quarter ended December 31,
2005.

# Executive Officers of
the Registrant

Set
forth below is certain information concerning the executive officers of the Company as of
February 1, 2006:

|Name, Age and Position                  | Business Experience                                                    
|--------------------------------------- | -----------------------------------------------------------------------
|William D. Gehl, 59,                    | Mr. Gehl has served as Chairman of the Board of Directors of the       
|Chairman of the Board of  Directors and | Company since April, 1996 and as Chief Executive Officer of the Company
|Chief Executive Officer                 | since November, 1992. Mr. Gehl served as President of the Company from 
|                                        | November, 1992 to April, 2003 and has served as a director of the      
|                                        | Company since 1987.                                                    
|Malcolm F. Moore, 55,                   | Mr. Moore joined the Company as Executive Vice President and Chief     
|President and Chief Operating Officer   | Operating Officer in August, 1999. Mr. Moore was elected President and 
|                                        | Chief Operating Officer in April, 2003.                                

12

---

|Name, Age and Position                     | Business Experience                                                    
|------------------------------------------ | -----------------------------------------------------------------------
|                                           |                                                                        
|Thomas M. Rettler, 45,                     | Mr. Rettler joined the Company as Vice President and Chief Financial   
|Vice President and Chief Financial Officer | Officer in August, 2004. Prior to joining the Company, Mr. Rettler     
|                                           | served as Vice President, Finance and Chief Financial Officer for WICOR
|                                           | Industries, Inc. (WICOR), a manufacturing subsidiary of Wisconsin      
|                                           | Energy Corporation, from 2003 to July 2004. Mr. Rettler was also Vice  
|                                           | President, Finance for Sta-Rite Industries Inc., a subsidiary of WICOR,
|                                           | from 1999 to July 2004.                                                
|James J. Monnat, 50,                       | Mr. Monnat joined the Company as Treasurer and Director of Tax in      
|Treasurer                                  | January, 2005, and was appointed to the executive officer position of  
|                                           | Treasurer in July, 2005. Prior to joining the Company, Mr. Monnat      
|                                           | served as Chief Financial Officer and Treasurer of WE Power, LLC, a    
|                                           | Wisconsin Energy Corporation subsidiary, from December, 2001 to        
|                                           | September, 2004. Mr. Monnat was an independent financial consultant    
|                                           | during 2001. Mr. Monnat was Treasurer of WICOR, Inc., a                
|                                           | Milwaukee-based utility holding company, from 1998 to 2000.            
|Daniel M. Keyes, 37,                       | Mr. Keyes joined the Company as Vice President Sales and Marketing in  
|Vice President Sales and Marketing         | December 2000. From 1996 until joining the Company, Mr. Keyes held a   
|                                           | variety of senior marketing management positions, most recently,       
|                                           | Director, Strategic Accounts, with CNH Global NV (a manufacturer of    
|                                           | agricultural and construction equipment).                              
|Daniel L. Miller, 47                       | Mr. Miller joined the Company as Director of Manufacturing Operations  
|Vice President Manufacturing  Operations   | in October, 2001. Mr. Miller was appointed Vice President,             
|                                           | Manufacturing Operations in December, 2005. Prior to joining the       
|                                           | Company, Mr. Miller held a variety of management positions in          
|                                           | manufacturing and distribution, most recently General Manager of       
|                                           | Distribution and Logistics and Operations Manager of multiple          
|                                           | facilities for Woods Equipment Company, a manufacturer of              
|                                           | agricultural, turf, and construction equipment.                        
|Michael J. Mulcahy, 59,                    | Mr. Mulcahy has served as General Counsel of the Company since 1974 and
|Vice President, Secretary  and General     | became Secretary in 1977 and a Vice President in 1986.                 
|Counsel                                   
|Kenneth H. Feucht, 57                      | Mr. Feucht has served as Vice President of Human Resources since May,  
|Vice President of Human Resources          | 2002. Mr. Feucht was Director of Human Resources from 1999 to 2002 and 
|                                           | Manager of Human Resources from 1993 to 1999.                          

All
officers of the Company are elected annually by the Board of Directors following the
Annual Meeting of Shareholders. The Company has an employment agreement with William D.
Gehl, pursuant to which he is to serve as Chief Executive Officer of the Company through
the expiration of the agreement on June 14, 2008.

13

---

# PART II

# Item 5. Market for
Registrants Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities

On
July 22, 2005, the Company declared a three-for-two common stock split in the form of a
50% stock dividend with a record date of August 10, 2005, and a payment date of August 24,
2005. The purpose of the stock dividend was to create additional market liquidity for the
Companys common stock and, thus, enhance shareholder value. The information in this
Annual Report on Form 10-K has been adjusted to reflect the stock split.

In
September 2001, the Companys Board of Directors authorized a stock repurchase plan
providing for the repurchase of up to 500,000 shares of the Companys outstanding
common stock in open market or privately negotiated transactions. The plan does not have
an expiration date. No shares were repurchased under the plan during 2005. As of December
31, 2005, the Company had authority to repurchase 272,150 shares under the plan.

The
Companys common stock is traded on the Nasdaq National Market under the symbol
GEHL. A summary of the high and low prices of Gehls common stock by
quarter, as reported by the Nasdaq National Market, follows.

|              
|--------------
|Price Range   
|              
|First Quarter 
|Second Quarter
|Third Quarter 
|Fourth Quarter
|              
|Year          
|              

The
Company did not declare or pay any cash dividends in 2005 or 2004 and does not anticipate
paying any cash dividends on its common stock in the foreseeable future. As of February
21, 2006, shareholders of record numbered 437.

14

---

# Item 6. Selected
Financial Data

|Five Year Financial Summary                     
|------------------------------------------------
|Dollars in Thousands, Except Per Share Data     
|Summary of Operations                           
|Net sales                                       
|Gross profit                                    
|Strategic review process costs                  
|Asset impairment and other restructuring costs  
|Income from operations                          
|Income before income taxes                      
|Net income                                      
|                                                
|Financial Position at December 31               
|Current assets                                  
|Current liabilities                             
|Working capital                                 
|Accounts receivable - net                       
|Finance contracts receivable - net              
|Inventories                                     
|Property, plant and equipment - net             
|Total assets                                    
|Long-term debt                                  
|Total debt                                      
|Shareholders equity                            
|                                                
|Common Share Summary                            
|Diluted net income per share                    
|Basic net income per share                      
|Dividends per share                             
|Book value per share at year-end                
|Shares outstanding at year-end                  
|                                                
|Other Financial Statistics                      
|Capital expenditures                            
|Depreciation                                    
|Current ratio                                   
|Percent total debt to total capitalization      
|Net income as a percent of net sales            
|After-tax return on average shareholders equity
|Employees at year-end                           
|Common stock price range                        
|                                                

15

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# Item 7.
Managements Discussion and Analysis of Financial Condition and Results of Operations

# Overview

The
Companys net sales in 2005 of $478.2 million were 32% above the 2004 net sales of
$361.6 million. Construction equipment segment net sales in 2005 of $344.0 million were
42% above 2004 levels and comprised 72% of Company net sales in 2005 versus 67% in 2004.
Agricultural equipment segment net sales in 2005 of $134.3 million were 13% above 2004
levels and comprised 28% of Company net sales in 2005 versus 33% in 2004.

Income
from operations in 2005 was $38.3 million, or 8% of net sales, with the construction
equipment segment accounting for $32.2 million and the agricultural equipment segment
accounting for $6.1 million.

Net
income in 2005 was $21.8 million, or $1.97 per diluted share, compared with $13.4 million,
or $1.47 per diluted share, in 2004.

The
Companys total assets increased to $348.2 million at December 31, 2005 from $308.2
million at December 31, 2004, primarily due to increased receivables as a result of the
32% increase in net sales. Total outstanding debt decreased to $54.9 million at December
31, 2005 from $89.8 million at December 31, 2004, primarily due to the application of net
proceeds received from the public offering of stock that occurred in September of 2005.

# Sales of Common Stock
and Stock Split

On
September 26, 2005, the Company completed a public offering of 2,395,000 shares of its
common stock at a price to the public of $28.12. The offering included 1,748,125 primary
shares sold by the Company and 646,875 secondary shares sold by one selling shareholder,
Neuson Finance GmbH. The Company received approximately $46.1 million in net proceeds from
the sale of shares by it in the offering, after deducting underwriting discounts,
commissions and expenses. The Company used the net proceeds it received from the offering
to repay debt outstanding under its credit facility.

On
July 22, 2005, the Company declared a three-for-two common stock split in the form of a
50% stock dividend with a record date of August 10, 2005, and a payment date of August 24,
2005. The purpose of the stock dividend was to create additional market liquidity for the
Companys common stock and, thus, enhance shareholder value. The information in this
Annual Report on Form 10-K has been adjusted to reflect the stock split.

On
July 22, 2004, in conjunction with the establishment of a strategic alliance with Manitou
BF S.A. (Manitou), the worlds largest manufacturer of telescopic
handlers, the Company issued 1,442,652 shares of common stock to Manitou at an aggregate
purchase price of $19.8 million. The proceeds from the sale of the common stock were used
to pay down the Companys line of credit facility. Beginning in 2005, the Company and
Manitou distributed select models of each others telescopic handler product lines in
the United States through their respective dealer networks.

16

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# Results of Operations

|2005                         
|-----------------------------
|Net Sales                    
|                             
|                             
|                             
|                             
|                             
|Net Sales % of Total         
|                             
|                             
|                             
|Income (Loss) from Operations
|                             
|                             
|                             
|                             

# 2005 vs. 2004

Net Sales

Net
sales for 2005 were $478.2 million compared to $361.6 million 2004, an increase of $116.6
million, or 32%. Construction equipment segment net sales were $344.0 million in 2005, a
42% increase from 2004 net sales of $242.4 million. The construction equipment segment net
sales were favorably impacted by the continued strength of the North American construction
markets and market share gains in Europe during the year. Demand for the Companys
skid loaders was strong as shipments increased 23% from 2004, including shipments of skid
loaders by the Companys European subsidiary, Gehl Europe. Telescopic handler
shipments in 2005 increased 62% from 2004 as demand from larger rental customers remained
robust in 2005. Demand for compact track loaders and compact excavators resulted in sales
increases from 2004 of 67% and 71%, respectively. The Companys attachment
subsidiary, CE Attachments, Inc. increased sales 24% from 2004. In addition to the
increased shipments noted above, approximately 6 percentage points of the net sales
increase was due to price increases during 2005 and 2004.

Agricultural
equipment segment net sales were $134.3 million in 2005, an increase of 13% from $119.2 in
2004. Compact equipment net sales through this segment increased 28% from 2004, primarily
due to demand for skid loaders and compact track loaders as shipments of these products
increased 20% and 41%, respectively, from 2004. In addition, 2005 net sales were favorably
impacted by shipments of new telescopic handler models introduced during 2005. Net sales
in 2005 were also favorably impacted by approximately 5 percentage points due to price
increases during 2005 and 2004. These increases in net sales were partially offset by a
16% reduction in the shipment of agricultural implement products in 2005, primarily due to
a reduction in market demand for certain products during 2005. Compact equipment and
agricultural implement products accounted for 70% and 30%, respectively, of the segment
sales in the 2005 compared to 62% and 38%, respectively, in 2004.

Of
the Companys total net sales reported for 2005, $76.4 million were made to customers
residing outside of the United States compared with $57.0 million in 2004. The increase in
export sales was primarily due to increased sales in Europe as discussed above.

Gross Profit

Gross
profit was $93.7 million in 2005 compared to $71.7 million in 2004, an increase of $22.0
million, or 31%. Gross profit as a percentage of net sales (gross margin) was
19.6% for 2005 compared to 19.8% for 2004. Gross margin for the construction equipment
segment was 20.5% for 2005 compared to 21.7% for 2004. The unfavorable impact of product
cost increases (primarily increases in the cost of the material content of the product) on
gross profit has been largely offset by multiple price increases implemented by the
Company; however, 2005 gross margin was adversely impacted by 1.1 percentage points
because price increases have not exceeded cost increases to a level that would result in
no change in gross margin. In addition, a shift in the mix of product shipped during 2005
compared to 2004 accounted for the remainder of the decline in gross margin.

17

---

Gross
margin for the agricultural equipment segment was 17.3% for 2005 compared to 15.9% for
2004. The increase in the segment gross margin was primarily due to an increase in the
compact equipment product net sales as a percentage of total segment net sales as these
products have a gross margin similar to the construction equipment segment gross margin.
The favorable impact of the shift in sales mix was partially offset by a reduction in the
gross margin for agricultural implement products as the Company reduced production levels,
including a temporary shutdown of the West Bend facility during the 2005 second quarter,
in response to lower market demand for these products resulting in unfavorable overhead
absorption.

Selling, General and
Administrative Expenses

Selling,
general and administrative expenses were $55.4 million, or 11.6% of net sales, for 2005
compared to $51.0 million, or 14.1% of net sales, for 2004. The increase in spending is
primarily the result of items that vary with sales levels. Selling, general and
administrative expenses as a percentage of net sales improved as the growth in net sales
exceeded expense increases.

Income from Operations

Income
from operations for 2005 was $38.3 million, or 8.0% of net sales, compared to income from
operations of $20.7 million, or 5.7% of net sales, for 2004, an increase of $17.6 million,
or 85%. The 2005 income from operations includes the temporary West Bend facility shutdown
costs of $0.6 million, or 0.1% of net sales.

Interest Expense

Interest
expense was $5.5 million for 2005 compared to $2.8 million for 2004, an increase of $2.6
million. The increase in interest expense was due to an increase in the average
outstanding debt during 2005 and an increase in borrowing costs as one-month LIBOR rates
increased from 2004 to 2005. See Liquidity and Capital Resources below for
discussion of changes in outstanding debt.

Interest Income

Interest
income was $4.3 million for 2005 compared to $2.3 million for 2004, an increase of $2.0
million. The increase in interest income is primarily due to the interest earned on the
increased average balance of finance contracts receivable as well as accounts receivable.
See Liquidity and Capital Resources below for discussion of the changes in the
balance of finance contracts receivable and accounts receivable.

Net Other Expense

The
Company recorded net other expense of $4.3 million and $0.2 million in 2005 and 2004,
respectively. The increase in net other expense was primarily due to $1.5 million of one
time and other costs incurred with the implementation of the asset securitization program
during 2005 and a $2.5 million increase in the cost of selling finance contracts, which
included a $0.4 million realized gain on the termination of interest rate swap contracts
the Company had previously put in place to hedge the gain/loss on sale of finance
contracts (see notes 3 and 12 in Notes to Consolidated Financial Statements).
The increase in the loss on sales of finance contracts was primarily due to the sale of
$220.8 million of contracts during 2005 compared to $65.7 million during 2004. Throughout
the second half of 2004, the Company was holding finance contracts for a sale under an the
asset securitization program that was finalized in February 2005.

Provision for Income Taxes

The
Companys effective income tax rate was 33.6% in 2005 and 33.0% in 2004. The increase
in the effective tax rate was primarily due to an increase in the companys federal
tax rate from 34% in 2004 to 35% in 2005.

18

---

Net Income

Net
income was $21.8 million in 2005, or 4.6% of net sales, compared to net income of $13.4
million in 2004, or 3.7% of net sales, an increase of $8.4 million, or 63%. Diluted
earnings per share were $1.97 in 2005 compared to $1.47 in 2004. The 2005 net income
includes the previously discussed temporary West Bend facility shutdown after-tax costs of
$0.4 million, or $.03 per diluted share.

# 2004 vs. 2003

Net Sales

Net
sales for 2004 were $361.6 million compared to $244.4 million in 2003, an increase of 48%.
Construction equipment segment net sales were $242.4 million in 2004, a 56% increase from
2003 net sales of $155.5 million. The construction equipment segment was favorably
impacted by the improved economic conditions during 2004, including an increase in housing
starts of nearly 6%. Skid loader sales in 2004 were up 47% from 2003, including shipments
of skid loaders by the Companys European subsidiary, Gehl Europe, due to demand for
new Gehl skid loader models introduced in January 2004, as well as increased demand for
Mustang brand skid loaders. Telescopic handler sales more than doubled during 2004
compared to 2003 as demand from rental customers was strong. Demand for compact track
loaders, a product introduced in mid-2002, continued to grow and resulted in sales
increasing 86% during 2004 compared to 2003. The Companys, attachment subsidiary, CE
Attachments, Inc., increased sales 31% from 2003.

Gehl
agricultural equipment segment net sales were $119.2 million in 2004, an increase of 34%
from $88.9 million in 2003. The agricultural segment, in general, was favorably impacted
by the improved economic conditions during 2004 as well as improved milk prices paid to
dairy farmers in 2004 over 2003. Skid loader sales during 2004 increased 39% from 2003.
Demand for compact track loaders was also strong as 2004 sales more than doubled from
2003. In addition, sales of agricultural implements in 2004 increased 11% from 2003.

Of
the Companys total net sales reported for 2004, $57.0 million were made to customers
residing outside of the United States compared with $50.5 million in 2003. The increase
was due primarily to increased sales in Europe.

Gross Profit

Gross
profit in 2004 was $71.7 million compared to $51.4 million in 2003. Gross margin was 19.8%
in 2004 compared to 21.0% in 2003. Gross margin for the construction equipment segment was
21.7% for 2004 compared with 23.3% for 2003. Gross margin for the agricultural equipment
segment was 15.9% for 2004 compared to 17.1% for 2003. The 2004 gross margin for both
segments was negatively impacted by higher steel and component part costs, costs of
finished goods sourced from overseas due to the weak U.S. dollar versus the Euro and the
yen and manufacturing inefficiencies associated with the start-up of production of the new
Gehl skid loader models in early 2004. These cost increases, which adversely impacted
margins by approximately 3.9 percentage points, have been partially offset by selective
selling price increases in the first, third and fourth quarters of 2004, as well lower
levels of discounts and sales incentives, which improved margins by approximately 2.7
percentage points.

Lower
levels of discounts and sales incentives as well as the impact of 2004 price increases
favorably impacted the agricultural equipment segment gross margin by approximately 6.1
percentage points. This favorable impact was more than offset by an approximate 4.7
percentage point reduction in gross margin due to the product cost issues noted above as
well as an unfavorable mix of products shipped, which further reduced gross margins by
approximately 2.6 percentage points.

The
2004 price increases and a favorable mix of product shipments favorably impacted
construction equipment segment gross margins by approximately 3.2 percentage points. This
favorable impact was more than offset by an approximate 4.8 percentage point reduction in
gross margin due to the product cost issues noted above.

19

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Selling, General and
Administrative Expenses

Selling,
general and administrative expenses were $51.0 million, or 14.1% of net sales, in 2004
compared to $42.5 million, or 17.4% of net sales, in 2003. The increase in spending is
primarily the result of items that vary with sales levels as well as increased costs
associated with efforts to comply with the 2002 Sarbanes-Oxley Act, which totaled
approximately $0.6 million. However, selling, general and administrative expenses as a
percentage of net sales improved as the growth in net sales exceeded expense increases.

Income from Operations

Income
from operations for 2004 was $20.7 million, or 5.7% of net sales, compared to a $4.9
million, or 2.0% of net sales, for 2003, an increase of $15.8 million. The 2003 income
from operations reflects the impact of the $3.6 million impairment charge to adjust the
carrying value of the Companys Owatonna, Minnesota and Lebanon, Pennsylvania
facilities, which were closed in 2002 and sold in 2003 and 2004, respectively. Of the $3.6
million charge, $1.2 million and $2.4 million related to the construction equipment and
agricultural equipment segments, respectively.

Interest Expense

Interest
expense decreased $0.8 million, or 22%, to $2.8 million in 2004 compared to $3.6 million
in 2003. The decrease in the Companys average outstanding debt balance and lower
average borrowing costs contributed to a decrease in the 2004 interest expense.

Interest Income

Interest
income increased $0.5 million, or 30%, to $2.3 million in 2004 compared to $1.8 million in
2003. The increase in interest income is primarily due to the interest earned on the
increased balance of finance contracts receivable as the Company was retaining contracts
for a sale under the asset securitization program that was put in place in February 2005.

Other income (expense),
net

The
Company incurred net other expense of $0.2 million in 2004 compared to net other income of
$0.3 million in 2003. The change was primarily due to the Companys costs of selling
retail finance contracts during 2004 increasing $0.4 million from 2003 due to an
increasing interest rate environment.

Provision for Income
Taxes

The
Companys effective income tax rate was 33.0% in 2004 and 21.6% in 2003. The increase
in the effective tax rate was primarily due to the favorable impact of a $0.4 million tax
adjustment relating to the finalization of prior year tax returns during the fourth
quarter of 2003.

Net Income

Net
income was $13.4 million for 2004 compared with $2.6 million for 2003, an increase of
$10.8 million. Diluted earnings per share were $1.47 in 2004 compared to $.33 in 2003. Net
income in 2003 includes the after-tax impairment charge of $2.4 million, or $.29 per
diluted share, and an after-tax charge of $0.3 million, or $.04 per diluted share,
relating to the Companys former Owatonna, Minnesota and Lebanon, Pennsylvania
facilities. In addition, 2003 net income was favorably impacted by a $0.4 million, or $.05
per diluted share, tax adjustment related to finalization of prior year tax returns during
the 2003 fourth quarter.

20

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# Liquidity and Capital
Resources

Working Capital

The
Companys working capital increased to $200.2 million at December 31, 2005 from
$162.8 million twelve months earlier. The increase was primarily the result of an increase
in accounts receivable and inventories and a decrease in short-term borrowings, offset, in
part, by a decrease in finance contracts receivable.

Accounts Receivable and
Inventories

The
Companys accounts receivable increased $52.4 million to $175.9 million at December
31, 2005. The increase in accounts receivable was due to the 32% increase in net sales
during 2005, which was primarily driven by strong demand for skid loaders, telescopic
handlers, compact track loaders and compact excavators. The Companys inventories
increased $4.7 million to $43.6 million at December 31, 2005. The increase in inventories
was primarily to meet the rising demand for the Companys products.

Finance Contracts
Receivable

Finance
contracts receivable decreased $38.8 million to $34.5 million at December 31, 2005. The
Company had been holding finance contracts for a sale under an asset securitization
program from the third quarter of 2004 through February 2005. Upon finalizing the asset
securitization program in February 2005, the Company began selling the held contracts, as
well as contracts originated after the inception of the program, through the asset
securitization program, which resulted in a decrease in the balance of finance contracts
receivable from December 31, 2004. See Off Balance Sheet Arrangements  Sales
of Finance Contracts Receivable following for additional discussion.

Short-term Borrowings

The
Company used a portion of the proceeds from a new revolving credit facility (See
Borrowing Arrangements below), which was put in place in June 2005, to repay,
in full, the short-term borrowings that were outstanding at December 31, 2004.

Capital Expenditures

|2005                
|--------------------
|Capital Expenditures
|Depreciation        
|                    

The
Company expended $7.6 million for property, plant and equipment in 2005, the majority of
which was incurred to expand the Yankton manufacturing facility and upgrade machinery and
equipment. The Company plans to make up to $8.0 million in capital expenditures in 2006,
primarily to enhance manufacturing and information technology capabilities and maintain
and upgrade machinery and equipment. The Company believes its Madison, South Dakota and
West Bend, Wisconsin manufacturing facilities will be sufficient to provide adequate
capacity for its operations for the foreseeable future. The Company believes its present
Yankton, South Dakota facility will operate at, or near, full capacity throughout 2006.

Debt and Equity

|2005                
|--------------------
|($ millions)        
|Total Debt          
|Shareholders Equity
|                    
|% Total Debt to     
|Total Capitalization
|                    

21

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At
December 31, 2005, shareholders equity had increased $72.0 million to $208.5 million
from $136.5 million a year earlier. This increase primarily reflects the impact of the
$46.1 million in proceeds received from the sale of the Companys common stock in
September 2005 (see Sale of Common Stock above), 2005 net income of $21.8
million and $4.2 million related to the exercise of stock options.

In
September 2001, the Companys Board of Directors authorized a stock repurchase plan
providing for the repurchase of up to 500,000 shares of the Companys outstanding
common stock. No shares were repurchased under this authorization during 2005 or 2004. As
of December 31, 2005, the Company has repurchased an aggregate of 227,850 shares under
this authorization. All treasury stock acquired by the Company has been cancelled and
returned to the status of authorized but unissued shares.

Borrowing Arrangements

On
June 3, 2005, the Company entered into a $125 million revolving credit facility (the
Facility) with a syndicate of commercial bank lenders. The credit commitment
under the facility is for a five-year period expiring June 3, 2010. At any time during the
term of the Facility, the Company has the option to request an increase in the credit
commitment under the Facility to $175 million from the current syndicate of commercial
bank lenders or any other commercial bank lender(s) selected by the Company. Borrowings
under the Facility are secured by the Companys accounts receivable, inventory and
the capital stock of certain wholly-owned subsidiaries. The Company may borrow up to $25
million under the Facility in a currency other than the U.S. Dollar. The Company may elect
to pay interest on U.S. Dollar borrowings under the Facility at a rate of either (1) the
London Interbank Offered Rate (LIBOR) plus 0.75% to 1.50% or (2) a base rate
defined as the prime commercial rate less 0.0% to 1.0%. The Companys actual
borrowing costs for LIBOR or base rate borrowings is determined by reference to a pricing
grid based on the Companys ratio of funded debt to total capitalization. Interest on
amounts borrowed under the Facility in currencies other than the U.S. Dollar will be
priced at a rate equal to LIBOR plus 0.75% to 1.50%. As of December 31, 2005, the weighted
average interest rate on Company borrowings outstanding under the Facility was 5.21%. The
Facility requires the Company to maintain compliance with certain financial covenants
related to total capitalization, interest expense coverage, tangible net worth, capital
expenditures and operating lease spending. The Company was in compliance with all
covenants as of December 31, 2005.

Borrowings
under the Facility and the previous asset-based senior secured debt facility were $51.5
million at December 31, 2005 versus $69.0 million a year earlier. Available unused
borrowings under the Facility and the previous asset-based senior secured debt facility
were $73.5 million at December 31, 2005 versus $19.3 million a year earlier.

In
October 2005, the Company entered into a $15 million committed line of credit facility
with a commercial bank lender. Borrowings under this facility bear interest at 1.85% above
the LIBOR for 30 day deposits reset monthly and are secured by a first priority lien on an
assigned pool of retail finance contracts receivable. This facility expires on April 30,
2006. There were no borrowings outstanding under this facility at December 31, 2005.

In
addition, the Company has access to a 2.5 million committed foreign short-term
credit facility. Borrowings of 1.5 million were outstanding at a weighted average
interest rate of 3.92% at December 31, 2005.

The
Company believes it has adequate capital resources and borrowing capacity to meet its
projected capital requirements for the foreseeable future. Requirements for working
capital, capital expenditures, pension fund contributions and debt maturities in fiscal
2006 will continue to be funded by operations and the Companys borrowing
arrangements.

22

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Contractual Obligations

A
summary of the Companys significant contractual obligations as of December 31, 2005
are as follows (in thousands):

|                             
|-----------------------------
|Contractual Obligations:     
|Debt Obligations             
|Operating Leases             
|                             
|Total Contractual Obligations
|                             

Debt
Obligations do not include interest payments on the outstanding debt balance.

Off-Balance Sheet
Arrangements  Sales of Finance Contracts Receivable

The
sale of finance contracts is an important component of the Companys overall
liquidity. In February 2005, the Company entered into an asset securitization program with
a financial institution (the Purchaser) whereby the Company can sell, through
a revolving securitization facility, up to $150 million of retail installment sale
contracts (retail installment sale contracts or finance contracts
receivable). The Company sells portfolios of its finance contracts receivable to a
wholly owned, bankruptcy-remote special purpose subsidiary (SPE) which, in
turn, sells each such portfolio to a wholly owned bankruptcy-remote special purpose
subsidiary (QSPE) of the SPE. The QSPE, in turn, sells a participating
interest in each such portfolio of finance contracts receivable to the Purchaser. The
Purchaser receives a security interest in each such portfolio of finance contracts
receivable. The Purchaser has no recourse against the Company for uncollectible finance
contracts receivable, if any; however, the Companys retained interest in the
portfolio of finance contracts receivable is subordinate to the Purchasers interest.
At December 31, 2005, the Company had available unused capacity of $58.0 million under
this facility. In February 2006, the Company terminated the asset securitization program
with the Purchaser. The Company and a third party financial institution are in
negotiations with respect to a new finance contracts receivable securitization facility
that would allow the Company to sell up to $300 million in finance contracts receivable
through a revolving facility. The Company anticipates having this enhanced asset
securitization program in place by the end of the first quarter of 2006. In addition to
the asset securitization program, the Company has arrangements with multiple financial
institutions to sell its finance contracts receivable with 5% limited recourse on the sold
portfolio of retail finance contracts. Prior to 2005, the Company sold certain finance
contracts receivable to various financial institutions on a full recourse basis. The
Company continues to service substantially all contracts, whether or not sold. At December
31, 2005, the Company serviced $268.5 million of sold finance contracts receivable of
which $109.7 million, $78.8 million and $80.0 million were sold through the asset
securitization program, limited recourse arrangements and full recourse arrangements,
respectively. It is the intention of the Company to continue to sell substantially all of
its existing as well as future finance contracts through an asset securitization program
or limited recourse arrangements. The Company believes that it will be able to arrange
sufficient capacity to sell its finance contracts for the foreseeable future.

# Accounting Pronouncements

During
December 2004, the Financial Accounting Standards Board issued SFAS
No. 123R, Share-Based Payment (SFAS 123R), which requires companies to
measure and recognize compensation expense for all stock-based payments at fair value.
Stock-based payments include stock option grants and other transactions under Company
stock plans. The Company grants options to purchase common stock to certain employees and
directors under various plans at prices equal to the market value of the stock on the
dates the options were granted. The Company is required to adopt SFAS 123R by the first
quarter of fiscal 2006. The Company anticipates using the modified prospective method of
adopting SFAS 123R and will record compensation expense related to stock options in its
income statement using the Black-Scholes option-pricing model upon adoption of SFAS 123R
in the first quarter of 2006. The Company expects to record approximately $1.1 million of
pre-tax compensation expense in 2006.

23

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In
March 2005, FASB issued FASB Interpretation No. 47, Accounting for
Conditional Asset Retirement Obligations (FIN 47). FIN 47 clarifies that a company
is required to recognize a liability for a conditional asset retirement obligation when
incurred if the fair value of the obligation can be reasonably estimated. This
interpretation further clarified conditional asset retirement obligations, as used in
SFAS No. 143, Accounting for Asset Retirement Obligations, as a
legal obligation to perform an asset retirement activity in which the timing and/or method
of settlement are conditional on a future event that may or may not be within the control
of the entity. FIN 47 is effective for companies no later than the end of their first
fiscal year ending after December 15, 2005. The adoption of FIN 47 did not have any
significant impact on the Companys Consolidated Financial Statements.

# Critical Accounting
Policies and Estimates

The
preparation of the Companys consolidated financial statements requires the Company
to make estimates and judgments that affect the reported amounts of assets, liabilities,
net sales and expenses. The Company bases its estimates on historical experience and on
various other assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions and materially
impact the carrying value of the assets and liabilities. The Company believes the
following accounting policies are critical to the Companys business operations and
the understanding of the Companys results of operations and financial condition.

Allowance for Doubtful Accounts

The
Companys accounts receivable are reduced by an allowance for amounts that may be
uncollectible in the future. In circumstances where the Company is aware of a specific
customers inability to meet its financial obligations, a specific reserve for bad
debts is recorded against the accounts receivable balance to reduce the amount due to the
net amount reasonably expected to be collected. Additionally, a general percentage of past
due receivables is reserved, based on the Companys past experience of
collectibility. If circumstances change (i.e., higher than expected defaults or an
unexpected material adverse change in a major customers ability to meet its
financial obligations), estimates of the recoverability of amounts due could be reduced by
a material amount.

Inventories

Inventories
are valued at the lower of cost or market value. Cost is determined using the last-in,
first-out (LIFO) method for the majority of the Companys inventories. In valuing
inventory, management is required to make assumptions regarding the level of reserves
required to value potentially obsolete or slow moving items to the lower of cost or market
value. Inventory reserves are established taking into account inventory age and frequency
of use or sale. While calculations are made involving these factors, significant
management judgment regarding expectations for future events is involved. Future events
that could significantly influence managements judgment and related estimates
include general economic conditions in markets where the Companys products are sold,
as well as new products and design changes introduced by the Company.

Accrued Warranty

The
Company establishes reserves related to the warranties provided on its products. Specific
reserves are maintained for programs related to known machine safety and reliability
issues. When establishing specific reserves, estimates are made regarding the size of the
population, the type of program, costs to be incurred and estimated participation.
Additionally, general reserves are maintained based on the historical percentage
relationships of warranty costs to machine sales and applied to current equipment sales.
If these estimates and related assumptions change, reserve levels may require adjustment.

Accrued Product Liability

The
Company records a general reserve for potential product liability claims based on the
Companys prior claim experience and specific reserves for known product liability
claims. Specific reserves for known claims are valued based upon the Companys prior
claims experience, including consideration of the jurisdiction, circumstances of the
accident, type of loss or injury, identity of plaintiff, other potential responsible
parties, analysis of outside counsel, and analysis of internal product liability counsel.
Actual product liability costs could be different due to a number of variables, including
decisions of juries or judges.

24

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Goodwill Impairment

In
connection with SFAS No. 142, Goodwill and Other Intangible Assets, the
Company is required to perform goodwill impairment reviews, at least annually, using a
fair-value-based approach. The Company performs its annual impairment review as of
December 31. As part of the annual impairment review, an estimate of the fair value of the
Companys construction equipment segment (the entire carrying amount of goodwill is
allocated to the construction segment), primarily by using a discounted cash flow
analysis, is performed. Significant assumptions used in this analysis include: expected
future revenue growth rates, operating profit margins, working capital levels and a
weighted average cost of capital. Changes in assumptions could significantly impact the
estimate of the fair value of the construction equipment segment, which could result in a
goodwill impairment charge and could have a significant impact on the results of the
construction equipment segment and the consolidated financial statements.

Pension and Postretirement
Benefits

Pension
and postretirement benefit costs and obligations are dependent on assumptions used in
calculation of these amounts. These assumptions, used by actuaries, include discount
rates, expected return on plan assets for funded plans, rate of salary increases, health
care cost trend rates, mortality rates and other factors. In accordance with accounting
principles generally accepted in the United States, actual results that differ from the
actuarial assumptions are accumulated and amortized to future periods and therefore affect
recognized expense and recorded obligations in future periods. While the Company believes
that the assumptions used are appropriate, differences in actual experience or changes in
assumptions may materially effect its financial position or results of operations.

# 2006 Outlook

The
Companys markets for compact equipment continued to show strong demand throughout
the fourth quarter of 2005. Orders in the fourth quarter increased over 100% compared to
the prior year, driven largely by the Companys introduction of its new E-Series skid
loader line and the continuing strength of rental industry demand for telescopic handlers.
Backlog at December 31, 2005, of $186.3 million, increased over 180% from year-end 2004.

Based
on 2006 forecasted market growth for compact equipment in North America, as well as the
Companys recent order rate, backlog position and production capacity, the Company
expects 2006 net sales to be in the range of $510 million to $520 million, an increase of
between 7% and 9% over 2005 levels. Operating margins are expected to continue to improve
as the result of initiatives to tightly manage costs and improve efficiencies throughout
the organization.

Provided
general economic conditions continue to be favorable, input prices remain stable, and the
availability of product from the Companys suppliers is sufficient to meet demand,
the Company expects to earn in the range of $2.13 to $2.18 per share in 2006. Expected
earnings per share include an estimated $.06 per share of compensation expense related to
the Companys adoption, in the first quarter of 2006, of SFAS 123R, which requires
companies to recognize compensation expense for all stock-based awards.

25

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# Item 7A. Quantitative
and Qualitative Disclosures About Market Risk

# Market Risk

The
Company is exposed to market risk from changes in interest rates as well as fluctuations
in currency. See further disclosure relating to variable rate debt under
Managements Discussion and Analysis and Results of Operations  Liquidity
and Capital Resources  Borrowing Arrangements included in Item 7 of this Form
10-K.

# Interest Rate Risk

The
Companys exposure to interest rates relates primarily to outstanding variable rate
borrowings that price off short-term market interest rates and the Companys retained
interest in securitized finance contracts receivable.

The
Companys Facility is primarily LIBOR-based and is subject to interest rate changes.
In order to manage interest rate exposures, the Company entered into a forward starting
interest rate swap agreement with a major financial institution to exchange variable rate
interest obligations for fixed rate obligations without the exchange of the underlying
principal amounts. Effective January 2006, under this agreement, the Companys
variable to fixed rate obligations are an aggregate swapped notional amount of $40 million
through January 2008. The aggregate notional amount of the swap decreases to $30 million
effective January 2008, $20 million effective January 2009, $10 million effective January
2010 and expires in January 2011. The Company pays a 4.89% fixed interest rate under the
swap agreement and receives a 30 day LIBOR variable rate. The reference 30 day LIBOR rate
was 4.385% at December 31, 2005.

The
variable to fixed interest rate swap is an effective cash-flow hedge. The fair value of
the swaps will be recorded on the balance sheet, with changes in fair value included in
other comprehensive income (loss). Swap gains or losses included in other comprehensive
income (loss) are reclassified into earnings at the time the related interest expense is
recognized or settlement of the obligation occurs.

A
10% increase or decrease in the average cost of the Companys variable rate debt
would result in a change in pre-tax interest expense of approximately $270,000 based on
borrowings outstanding at December 31, 2005.

# Commodity Risk

The
Company is exposed to fluctuations in market prices for commodities, especially steel. The
Company has established arrangements to manage the negotiations of commodity prices and,
where possible, to limit near-term exposure to fluctuations in certain raw material
prices.

# Currency Risk

The
Company has limited exposure to foreign currency exchange fluctuations. Certain sales are
made in Canadian dollars; however, to minimize this exposure, the Company borrows in
Canadian dollars under the Facility. The Company purchases certain inventory components
and finished goods from suppliers in Europe and Japan. To the extent the U.S. dollar
strengthens or weakens against the Euro or the Yen, the Companys purchase price
could be affected under risk sharing mechanisms in certain supply agreements. From time to
time the Company has entered into contracts to hedge a portion of its currency risk
associated with supply agreements which do not contain currency risk sharing mechanisms.
The Company was not a party to any currency hedging contracts at December 31, 2005.

26

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# Item 8. Financial
Statements and Supplementary Data

# INDEX TO FINANCIAL
STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

|                                                                       
|-----------------------------------------------------------------------
|Financial Statements:                                                  
|Managements Annual Report on Internal Control Over Financial Reporting
|Report of Independent Registered Public Accounting Firm                
|Consolidated Balance Sheets at December 31, 2005 and 2004              
|Consolidated Statements of Income for the                              
|three years ended December 31, 2005                                    
|Consolidated Statements of Shareholders' Equity for the                
|three years ended December 31, 2005                                    
|Consolidated Statements of Cash Flows for the                          
|three years ended December 31, 2005                                    
|Notes to Consolidated Financial Statements                             
|Page                                                                   
|Financial Statement Schedule:                                          
|Schedule II - Valuation and Qualifying Accounts for the                
|three years ended December 31, 2005                                    

All other schedules are omitted
because they are not applicable or the required information is shown in the financial
statements or notes thereto.

27

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# Managements
Annual Report on Internal Control Over Financial Reporting

The
Companys management is responsible for establishing and maintaining adequate
internal control over financial reporting, as such term is defined in Rules 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934. The Companys internal control
over financial reporting is designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with accounting principles generally accepted in the
United States.

Because
of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

The
Companys management assessed the effectiveness of the Companys internal
control over financial reporting as of December 31, 2005 using the criteria set forth in
Internal Control  Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on this assessment, the Companys
management concludes that, as of December 31, 2005, the Companys internal control
over financial reporting was effective based on those criteria.

The
Companys assessment of the effectiveness of our internal control over financial
reporting as of December 31, 2005 has been audited by PricewaterhouseCoopers LLP, an
independent registered public accounting firm, as stated in their report which is included
herein.

/s/ William D. Gehl  William D.
GehlChairman of the Board of Directorsand Chief Executive Officer

/s/ Thomas M. Rettler
Thomas M. Rettler
Vice President and Chief
Financial Officer

28

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# Report of Independent
Registered Public Accounting Firm

To the Board of Directors and
Shareholders of Gehl Company:

We
have completed an integrated audit of Gehl Companys 2005 and 2004 consolidated
financial statements and of its internal control over financial reporting as of December
31, 2005 and an audit of its 2003 consolidated financial statements in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Our
opinions, based on our audits, are presented below.

Consolidated financial
statements and financial statement schedule

In
our opinion, the consolidated financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of Gehl Company and its
subsidiaries at December 31, 2005 and 2004, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2005 in
conformity with accounting principles generally accepted in the United States of America.
In addition, in our opinion, the financial statement schedule listed in the accompanying
indexpresents fairly, in all material respects, the
information set forth therein when read in conjunction with the related consolidatedfinancial
statements. These financial statements and financial statement schedule are the
responsibility of the Companys management. Our responsibility is to express an
opinion on these financial statements and financial statement schedule based on our
audits. We conducted our audits of these statements in accordance with the standards of
the Public Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit of financial statements
includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

Internal control over
financial reporting

Also,
in our opinion, managements assessment, included in Managements Report on
Internal Control Over Financial Reporting appearing under Item 8, that the Company
maintained effective internal control over financial reporting as of December 31, 2005
based on criteria established in Internal Control  Integrated Framework issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly
stated, in all material respects, based on those criteria. Furthermore, in our opinion,
the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2005, based on criteria established in Internal
Control Integrated Framework issued by the COSO. The Companys management
is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting. Our
responsibility is to express opinions on managements assessment and on the
effectiveness of the Companys internal control over financial reporting based on
our audit. We conducted our audit of internal control over financial reporting in
accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was
maintained in all material respects. An audit of internal control over financial
reporting includes obtaining an understanding of internal control over financial
reporting, evaluating managements assessment, testing and evaluating the design and
operating effectiveness of internal control, and performing such other procedures as we
consider necessary in the circumstances. We believe that our audit provides a reasonable
basis for our opinions.

A
companys internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted
accounting principles. A companys internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition
of the companys assets that could have a material effect on the financial
statements.

29

---

Because
of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

/s/
PricewaterhouseCoopers LLPMilwaukee, Wisconsin  March 3, 2006

30

---

# Gehl Company and
SubsidiariesConsolidated Balance Sheets

|2005                                                                     
|-------------------------------------------------------------------------
|Assets                                                                   
|Cash                                                                     
|Accounts receivable-net                                                  
|Finance contracts receivable-net                                         
|Inventories                                                              
|Deferred income tax assets                                               
|Prepaid expenses and other current assets                                
|                                                                         
|Total current assets                                                     
|                                                                         
|Property, plant and equipment-net                                        
|Finance contracts receivable-net, non-current                            
|Goodwill                                                                 
|Other assets                                                             
|                                                                         
|Total assets                                                             
|                                                                         
|Liabilities and Shareholders Equity                                     
|Current portion of long-term debt obligations                            
|Short-term debt obligations                                              
|Accounts payable                                                         
|Accrued and other current liabilities                                    
|                                                                         
|Total current liabilities                                                
|                                                                         
|Line of credit facility                                                  
|Long-term debt obligations                                               
|Deferred income tax liabilities                                          
|Other long-term liabilities                                              
|                                                                         
|Total long-term liabilities                                              
|                                                                         
|Common stock, $.10 par value, 25,000,000 shares authorized,              
|12,006,527 and 9,931,823 shares outstanding at December 31, 2005 and 2004
|respectively(1)                                                          
|Preferred stock, $.10 par value, 2,000,000 shares authorized, 250,000    
|shares designated as Series A preferred stock, no shares issued          
|Capital in excess of par(1)                                              
|Retained earnings                                                        
|Accumulated other comprehensive loss                                     
|                                                                         
|Total shareholders equity                                               
|                                                                         
|Total liabilities and shareholders equity                               
|                                                                         
|Contingencies (Notes 3 and 15)                                           
|                                                                         
|The accompanying notes are an integral part of the financial statements. 
|                                                                         
|(1) Adjusted for stock split. See Note 11.                               

31

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# Gehl Company and
SubsidiariesConsolidated Statements of Income

|2005                                                                    
|------------------------------------------------------------------------
|Net sales                                                               
|Cost of goods sold                                                      
|                                                                        
|Gross profit                                                            
|Selling, general and administrative expenses                            
|Asset impairment and other restructuring costs                          
|                                                                        
|Total operating expenses                                                
|                                                                        
|Income from operations                                                  
|Interest expense                                                        
|Interest income                                                         
|Other (expense) income, net                                             
|                                                                        
|Income before income taxes                                              
|Provision for income taxes                                              
|                                                                        
|Net income                                                              
|                                                                        
|Diluted net income per common share(1)                                  
|                                                                        
|Basic net income per common share(1)                                    
|                                                                        
|The accompanying notes are an integral part of the financial statements.
|                                                                        
|(1) Adjusted for stock split.  See Note 11.                             

32

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# Gehl Company and
SubsidiariesConsolidated Statements of Shareholders Equity

|In Thousands                                                             | Total |  | Comprehensive
Income (Loss) |         | Retained
Earnings |   | Accumulated
Other
Comprehensive
Loss |   | Common
Stock |         | Capital
In Excess
of Par |  
|------------------------------------------------------------------------ | ----- |  | --------------------------- | ------- | ----------------- | - | ------------------------------------ | - | ------------ | ------- | ------------------------ | -
|Balance at December 31, 2002(1)                                          |       |  | $                           | 96,138  |                   |   |                                      |   | $            | 99,472  |                          | $
|Comprehensive income:                                                    |       | 
|Net income                                                               |       |  |                             | 2,630   |                   | $ | 2,630                                |   |              | 2,630   |                          |  
|Minimum pension liability adjustments,                                   |       | 
|net of $855 of taxes                                                     |       |  |                             | (1,589  | )                 |   | (1,589                               | ) |              |         |                          |  
|Currency translation adjustment                                          |       |  |                             | 995     |                   |   | 995                                  |   |              |         |                          |  
|Unrealized gains (losses), net of $104 of taxes                          |       |  |                             | 195     |                   |   | 195                                  |   |              |         |                          |  
|                                                                         |       | 
|Comprehensive income                                                     |       |  |                             |         |                   |   | 2,231                                |   |              |         |                          |  
|                                                                         |       | 
|Exercise of stock options, including tax                                 |       | 
|benefit of $44                                                           |       |  |                             | 360     |                   |   |                                      |   |              |         |                          |  
|Treasury stock purchases/cancellations                                   |       |  |                             | (729    | )                 |   |                                      |   |              |         |                          |  
|                                                                        
|Balance at December 31, 2003(1)                                          |       |  |                             | 98,000  |                   |   |                                      |   |              | 102,102 |                          |  
|Comprehensive income:                                                    |       | 
|Net income                                                               |       |  |                             | 13,387  |                   |   | 13,387                               |   |              | 13,387  |                          |  
|Minimum pension liability adjustments,                                   |       | 
|net of $229 of taxes                                                     |       |  |                             | 426     |                   |   | 426                                  |   |              |         |                          |  
|Currency translation adjustment                                          |       |  |                             | 734     |                   |   | 734                                  |   |              |         |                          |  
|Unrealized gains (losses), net of $15 of taxes                           |       |  |                             | 28      |                   |   | 28                                   |   |              |         |                          |  
|                                                                         |       | 
|Comprehensive income                                                     |       |  |                             |         |                   |   | 14,575                               |   |              |         |                          |  
|                                                                         |       | 
|Issuance of common stock                                                 |       |  |                             | 19,812  |                   |   |                                      |   |              |         |                          |  
|Exercise of stock options, including tax                                 |       | 
|benefit of $636, and other                                               |       |  |                             | 4,074   |                   |   |                                      |   |              |         |                          |  
|                                                                        
|Balance at December 31, 2004(1)                                          |       |  |                             | 136,461 |                   |   |                                      |   |              | 115,489 |                          |  
|Comprehensive income:                                                    |       | 
|Net income                                                               |       |  |                             | 21,800  |                   |   | 21,800                               |   |              | 21,800  |                          |  
|Minimum pension liability adjustments,                                   |       |  |                             | 1,069   |                   |   | 1,069                                |   |              |         |                          |  
|net of $562 of taxes                                                     |       | 
|Currency translation adjustment                                          |       |  |                             | (1,355  | )                 |   | (1,355                               | ) |              |         |                          |  
|Unrealized gains (losses), net of $13 of taxes                           |       |  |                             | (25     | )                 |   | (25                                  | ) |              |         |                          |  
|                                                                         |       | 
|Comprehensive income                                                     |       |  |                             |         |                   | $ | 21,489                               |   |              |         |                          |  
|                                                                         |       | 
|Issuance of common stock                                                 |       |  |                             | 46,064  |                   |   |                                      |   |              |         |                          |  
|Exercise of stock options, including tax                                 |       | 
|benefit of $1,110, and other                                             |       |  |                             | 4,479   |                   |   |                                      |   |              |         |                          |  
|                                                                        
|Balance at December 31, 2005                                             |       |  | $                           | 208,493 |                   |   |                                      |   | $            | 137,289 |                          | $
|                                                                        
|The accompanying notes are an integral part of the financial statements.
|                                                                        
|(1) Adjusted for stock split. See Note 11.                              

33

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# Gehl Company and SubsidiariesConsolidated
Statements of Cash Flows

|2005                                                                   
|-----------------------------------------------------------------------
|Cash Flows from Operating Activities                                   
|Net income                                                             
|Adjustments to reconcile net income to net cash (used for)             
|provided by operating activities:                                      
|Depreciation and amortization                                          
|Compensation expense for long-term incentive stock grants              
|Gain on sale of property, plant and equipment                          
|Asset impairment (non-cash)                                            
|Cost of sales of finance contracts                                     
|Deferred income taxes                                                  
|Tax benefit related to exercise of stock options                       
|Proceeds from sales of finance contracts                               
|(Decrease) increase in cash due to changes in:                         
|Accounts receivable-net                                                
|Finance contracts receivable-net                                       
|Inventories                                                            
|Prepaid expenses and other current assets                              
|Other assets                                                           
|Accounts payable                                                       
|Other liabilities                                                      
|                                                                       
|Net cash (used for) provided by operating activities                   
|                                                                       
|Cash Flows from Investing Activities                                   
|Property, plant and equipment additions                                
|Proceeds from sale of property, plant and equipment                    
|Increase (decrease) in other assets                                    
|                                                                       
|Net cash (used for) provided by investing activities                   
|                                                                       
|Cash Flows from Financing Activities                                   
|(Repayments of) proceeds from revolving credit loans                   
|Proceeds from short-term borrowings                                    
|Repayments of short-term borrowings                                    
|Repayment of industrial development bonds, net of debt                 
|reserve fund of $649                                                   
|Proceeds from (repayments of) other borrowings - net                   
|Proceeds from issuance of common stock                                 
|Proceeds from exercise of stock options                                
|Treasury stock purchases                                               
|                                                                       
|Net cash provided by (used for) financing activities                   
|                                                                       
|Net (decrease) increase in cash                                        
|                                                                       
|The accompanying notes are an integral part of the financial statements

34

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# Gehl Company and
SubsidiariesNotes To Consolidated Financial Statements

# Note 1 
Significant Accounting Policies

Consolidation: Gehl
Company is engaged in the manufacture and distribution of equipment and machinery for the
construction market, and in the manufacture and distribution of equipment and machinery
primarily for the dairy, livestock and poultry agricultural sector. The consolidated
financial statements include the accounts of the Company and its wholly-owned
subsidiaries.  All intercompany transactions and balances are eliminated.

Use
of Estimates: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires management to make
estimates and assumptions, in certain circumstances, which affect the reported amounts of
assets and liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses during the reporting period. Ultimate realization of assets and
settlement of liabilities in the future could differ from those estimates.

Revenue
Recognition: The Company recognizes revenue when all of the following criteria are
met: persuasive evidence of an arrangement exists; delivery has occurred and ownership has
transferred to the dealer or distributor; the price to the dealer or distributor is fixed
and determinable; and collectibility is reasonably assured. The Company meets these
criteria for revenue recognition upon shipment of products to dealers and distributors.

Shipping
and Handling Costs:    The Company records revenues and costs
associated with shipping its products within net sales and cost of goods sold,
respectively.

Discounts
and Sales Incentives: The Company classifies the costs associated with discounts and
sales incentives provided to dealers and distributors as a reduction of net sales.
Discounts are recorded upon shipment and sales incentives are recorded when offered.

Accounts
Receivable: The Company provides financing for its dealers in both the construction
and agricultural markets. The financing agreements provide for, in certain instances,
interest-free periods which generally range from four to nine months.

Finance
Contracts Receivable: The Company offers financing for its products to retail
customers and to its dealers. Finance contracts require periodic installments of principal
and interest over periods of up to 66 months.

Inventories:
Inventories are valued at the lower of cost or market. Cost is determined by the last-in,
first-out (LIFO) method for the majority of the Companys inventories.

Properties
and Depreciation: Properties are stated at cost. When properties are sold or otherwise
disposed of, cost and accumulated depreciation are removed from the respective accounts
and any gain or loss is included in income. The Company provides for depreciation of
assets using the straight-line method for financial reporting purposes and accelerated
methods for income tax purposes. Depreciation is recorded using the following estimated
useful lives for financial statement purposes:

|                             
|-----------------------------
|Buildings                    
|Machinery and equipment      
|Autos and trucks             
|Office furniture and fixtures
|                             

Expenditures
which substantially increase value or extend asset lives are capitalized. Expenditures for
maintenance and repairs are charged against income as incurred.

35

---

The
Company reviews the carrying value of long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment would be determined based on a comparison of the undiscounted future operating
cash flows anticipated to be generated during the remaining life of the long-lived assets
to the carrying value. Measurement of any impairment loss would be based on discounted
operating cash flows.

Goodwill
and Other Intangible Assets: Goodwill and intangible assets deemed to have indefinite
lives are not amortized; however, such assets must be tested for impairment at least
annually. Amortization is recorded for other intangible assets with definite lives. The
Company is subject to financial statement risk in the event that goodwill becomes
impaired.

Foreign
Currency Transactions: Foreign currency transaction gains and (losses) are included in
the determination of income. Foreign currency (losses) gains were $(104,000), $228,000 and
$441,000 in 2005, 2004 and 2003, respectively.

Foreign
Currency Translation: Assets and liabilities of the Companys foreign subsidiary
are translated at current exchange rates, and related revenues and expenses are translated
at the weighted-average exchange rates in effect for the year. Net exchange gains or
losses resulting from the translation of foreign financial statements and the effect of
exchange rate changes on intercompany transactions of a long-term investment nature are
accumulated and credited or charged directly to a separate component of shareholders
equity, titled Accumulated Other Comprehensive Loss.

Income
Taxes: The Company follows the liability method in accounting for income taxes. The
liability method provides that deferred tax assets and liabilities be recorded based on
the difference between the tax basis of assets and liabilities and their carrying amounts
for financial reporting purposes.

Product
Liability Costs: The Company directly assumes all liability for costs associated with
claims up to specified limits in any policy year. Known incidents involving the
Companys products are investigated and reserves are established for any estimated
liability.

Environmental
Costs: Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition caused by
past operations, and that do not contribute to current or future revenue generation, are
expensed. Liabilities are recorded when environmental assessments and/or remedial efforts
are probable, and the costs can be reasonably estimated.

Research
and Development Costs: Costs for research activities relating to product development
and improvement are charged against income as incurred. Such costs amounted to
approximately $2.6 million, $2.5 million and $2.6 million in 2005, 2004 and 2003,
respectively.

Other
Income (Expense): Other income (expense) is comprised primarily of foreign currency
transaction gains (losses), cost of sales of finance contracts, and other nonoperating
items.

Comprehensive
Income: Comprehensive income is defined as the sum of net income and all other
non-owner changes in equity (or accumulated other comprehensive loss). The components of
accumulated other comprehensive loss were as follows (net of tax) (in thousands):

|2005                                 
|-------------------------------------
|Minimum pension liability adjustments
|Currency translation adjustments     
|Unrealized losses                    
|                                     
|Accumulated other comprehensive loss 
|                                     

36

---

Stock-Based
Compensation: The Company maintains stock option plans for certain of its directors,
officers and key employees, which are described more fully under Note 11. For the periods
presented, the Company accounted for these plans under the recognition and measurement
principles of APB Opinion No. 25, Accounting for Stock Issued to Employees. No
compensation expense has been recognized for options granted under these plans as the
option price was equal to the market value of the Companys common stock on the date
of grant. The effect on net income and net income per share had the Company applied the
fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based
Compensation, is presented below (in thousands, except per share data):

|2005                                                           
|---------------------------------------------------------------
|Net income, as reported                                        
|Less: stock-based compensation expense determined based on fair
|value method, net of tax                                       
|                                                               
|Pro forma net income                                           
|                                                               
|Diluted net income per share:                                  
|As reported                                                    
|Pro forma                                                      
|Basic net income per share:                                    
|As reported                                                    
|Pro forma                                                      
|                                                               

The
fair value of each option granted is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average assumptions used
for grants in 2005, 2004 and 2003:

|2005                            
|--------------------------------
|Expected stock price volatility 
|Risk-free interest rate         
|Expected life of options - years
|                                

The
weighted-average grant-date fair value of options granted during 2005, 2004 and 2003 was
$9.27, $7.35 and $4.22, respectively.

Accounting
Pronouncements: During December 2004, the Financial Accounting Standards
Board issued SFAS No. 123R, Share-Based Payment (SFAS 123R), which
requires companies to measure and recognize compensation expense for all stock-based
payments at fair value. Stock-based payments include stock option grants and other
transactions under Company stock plans. The Company grants options to purchase common
stock to some of its employees and directors under various plans at prices equal to the
market value of the stock on the dates the options were granted. The Company is required
to adopt SFAS 123R by the first quarter of fiscal 2006. The Company anticipates using the
modified prospective method of adopting SFAS 123R and will record compensation expense
related to stock options in its income statement using the Black-Scholes option-pricing
model upon adoption of SFAS 123R in the first quarter of 2006. The Company expects to
record approximately $1.1 million of pre-tax compensation expense in 2006 related to
options granted prior to December 31, 2005.

In
March 2005, FASB issued FASB Interpretation No. 47, Accounting for
Conditional Asset Retirement Obligations (FIN 47). FIN 47 clarifies that a company
is required to recognize a liability for a conditional asset retirement obligation when
incurred if the fair value of the obligation can be reasonably estimated. This
interpretation further clarified conditional asset retirement obligations, as used in
SFAS No. 143, Accounting for Asset Retirement Obligations, as a
legal obligation to perform an asset retirement activity in which the timing and/or method
of settlement are conditional on a future event that may or may not be within the control
of the entity. FIN 47 is effective for companies no later than the end of their first
fiscal year ending after December 15, 2005. The adoption of FIN 47 did not have any
significant impact on the Companys Consolidated Financial Statements.

37

---

# Note 2  Accounts
Receivable

Accounts
receivable were comprised of the following (in thousands):

|2005                        
|----------------------------
|Accounts receivable         
|Less allowances for:        
|doubtful accounts           
|returns and dealer discounts
|                            
|                            
|                            

The
Company retains as collateral a security interest in the equipment associated with
accounts receivable.

# Note 3  Finance
Contracts Receivable

Unsold
finance contracts receivable were comprised of the following (in thousands):

|2005                           
|-------------------------------
|Finance contracts receivable   
|allowance for doubtful accounts
|                               
|                               
|Less: non-current portion      
|                               
|Current portion                
|                               

The
unsold finance contracts receivable at December 31, 2005 have a weighted-average interest
rate of approximately 5.0%. The Company retains as collateral a security interest in the
equipment associated with unsold finance contracts receivable. The Company also maintains
certain levels of dealer recourse deposits as additional security associated with finance
contracts receivable. The dealer recourse deposits totaled $2.5 million, $2.4 million and
$2.5 million at December 31, 2005, 2004 and 2003, respectively.

The
Company sells finance contracts receivables through various arrangements. In February
2005, the Company entered into an asset securitization program (the Program)
with a financial institution (the Purchaser) whereby the Company can sell,
through a revolving securitization facility, up to $150 million of retail installment sale
contracts (retail installment sale contracts or finance contracts
receivable). The following summarizes the Companys sales of retail finance
contracts receivable through the program during 2005 (in thousands):

|                                    | 2005
|----------------------------------- | ----
|Value of contracts sold             |     
|Cash received on sales of contracts |     
|                                   
|Retained interest in contracts sold |     
|                                   
|Cost of sales of finance contracts  |     
|                                   

The
Company sells portfolios of its finance contracts receivable to a wholly owned,
bankruptcy-remote special purpose subsidiary (SPE) which, in turn, sells each
such portfolio to a wholly owned bankruptcy-remote qualified special purpose subsidiary
(QSPE) of the SPE. The QSPE, in turn, sells a participating interest in each
such portfolio of finance contracts receivable to the Purchaser. The Purchaser receives a
security interest in each such portfolio of finance contracts receivable. The Company has
retained collection and administrative responsibilities for each such portfolio of finance
contracts receivable. The Purchaser has no recourse against the Company for uncollectible
finance contracts receivable, if any; however, the Companys retained interest in the
portfolio of finance contracts receivable is subordinate to the Purchasers interest.
The securitization program has a final maturity in February 2008, subject to annual
renewal by the Purchaser. In February 2006, the Company terminated the Program (see Note
17). The Company incurred one-time transaction costs of $1.5 million, which are included
in other expense in the accompanying Consolidated Statements of Income, related to the
implementation of the asset securitization program.

38

---

The
Companys retained interest is recorded at fair value, which is calculated based on
the present value of estimated future cash flows and reflects prepayment and loss
assumptions, which are based on historical results. At December 31, 2005, the fair value
of the retained interest was calculated using an interpolated risk-free rate of return of
4.39% based on U.S. Treasury rates, an approximate 17 month weighted-average prepayable
portfolio life and an approximate 1.2% annual loss rate. Changes in any of these
assumptions could affect the calculated value of the retained interest. A 10% increase in
the discount rate would decrease the fair value of the retained interest by $0.1 million.
A 10% increase in the annual loss rate would decrease the fair value of the retained
interest by $0.4 million. The Company received $9.1 million in cash flows related to the
retained interest during 2005. Retained interest of $3.7 million was included in other
current assets and $14.2 million was included in other assets in the accompanying
Consolidated Balance Sheet at December 31, 2005.

The
total credit capacity under the Program is $150 million, with finance contracts receivable
sold and being serviced by the Company totaling $109.7 million at December 31, 2005. Of
the $109.7 million in sold contracts receivable, $1.3 million were greater than 60 days
past due at December 31, 2005. Credit losses on contracts sold through the program were
$0.1 million as of December 31, 2005.

During
2005, the loss on sale of finance contracts receivable was partially offset by a $0.4
million realized gain on the termination of interest rate swap contracts that were put in
place to hedge gains / losses on the sale of finance contracts receivable (see Note 13).
The Company received $0.7 million in service fee income during 2005.

In
addition to the sale of finance contracts receivable through the asset securitization
program, the Company sold finance contracts through limited recourse arrangements during
2005. Based on the terms of the sales, recourse to the Company is limited to 5% of the
sold portfolio of finance contracts receivable. During 2004 and 2003, the Company sold
finance contracts through various full recourse arrangements. Amounts to cover potential
losses on these sold finance contracts receivable are included in the allowance for
doubtful accounts. The following table summarizes the Companys sales of finance
contracts receivable through these arrangements during 2005, 2004 and 2003 (in thousands):

|                                    | 2005
|----------------------------------- | ----
|Value of contracts sold             |     
|Cash received on sales of contracts |     
|                                   
|Cost of sales of finance contracts  |     
|                                   

At
December 31, 2005, the Company serviced $268.5 million of sold finance contracts
receivable of which $109.7 million, $78.8 million and $80.0 million were sold through the
asset securitization program, limited recourse arrangements and full recourse
arrangements, respectively.

The
finance contracts require periodic installments of principal and interest over periods of
up to 66 months, with interest rates based on market conditions. The Company has retained
the servicing of substantially all of these contracts which generally have maturities of
12 to 60 months.

The
sales of finance contracts receivable were accounted for as a sale in accordance with SFAS
No. 140 Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilitiesa Replacement of FASB Statement No. 125. Sales of
finance contracts receivable are reflected as a reduction of finance contracts receivable
in the accompanying Consolidated Balance Sheets and the proceeds received are included in
cash flows from operating activities in the accompanying Consolidated Statement of Cash
Flows.

39

---

# Note 4  Inventories

The
LIFO costing method was used for 73% and 74% of the Companys inventories at December
31, 2005 and 2004, respectively. If all of the Companys inventories had been valued
on a current cost basis, which approximates FIFO value, estimated inventories by major
classification would have been as follows (in thousands):

|2005                       
|---------------------------
|Raw materials and supplies 
|Work-in-process            
|Finished machines and parts
|                           
|Total current cost value   
|Adjustment to LIFO basis   
|                           
|                           
|                           

# Note 5  Property,
Plant and Equipment  Net

Property,
plant and equipment consisted of the following (in thousands):

|2005                             
|---------------------------------
|Land                             
|Buildings                        
|Machinery and equipment          
|Autos and trucks                 
|Office furniture and fixtures    
|                                 
|                                 
|Less: accumulated depreciation   
|                                 
|Property, plant and equipment-net
|                                 

# Note 6  Debt
Obligations

A
summary of the Companys debt obligations, and related current maturities, is as
follows (in thousands):

|2005                      
|--------------------------
|Line of credit facility   
|Secured term loan         
|Other debt obligations    
|                          
|                          
|Less: current portion     
|                          
|Long-term debt obligations
|                          

On
June 3, 2005, the Company entered into a $125 million revolving credit facility (the
Facility) with a syndicate of commercial bank lenders. The credit commitment
under the facility is for a five-year period expiring June 3, 2010. At any time during the
term of the Facility, the Company has the option to request an increase in the credit
commitment under the Facility to $175 million from the current syndicate of commercial
bank lenders or any other commercial bank lender(s) selected by the Company. Borrowings
under the Facility are secured by the Companys accounts receivable, inventory and
the capital stock of certain wholly-owned subsidiaries. The Company may borrow up to $25
million under the Facility in a currency other than the U.S. Dollar. The Company may elect
to pay interest on U.S. Dollar borrowings under the Facility at a rate of either (1)
(LIBOR) plus 0.75% to 1.50% or (2) a base rate defined as the prime commercial
rate less 0.0% to 1.0%. The Companys actual borrowing costs for LIBOR or base rate
borrowings is determined by reference to a pricing grid based on the Companys ratio
of funded debt to total capitalization. Interest on amounts borrowed under the Facility in
currencies other than the U.S. Dollar will be priced at a rate equal to LIBOR plus 0.75%
to 1.50%. As of December 31, 2005, the weighted average interest rate on Company
borrowings outstanding under the Facility was 5.21%.

40

---

The
Facility requires the Company to maintain compliance with certain financial covenants
related to total capitalization, interest expense coverage, tangible net worth, capital
expenditures and operating lease spending. The Company was in compliance with all
covenants as of December 31, 2005.

At
December 31, 2004, the Company maintained a $75 million asset-based senior secured debt
facility which was subject to a borrowing base related to the Companys accounts
receivable, unassigned finance contracts receivable and inventories. Under the terms of
this facility, the line of credit was increased to $90 million each year for the time
period March 1 to July 15. Amendments to this facility in September and December of 2004
extended the $90 million line of credit through December 31, 2004 and February 28, 2005,
respectively. The interest rate paid on borrowings denominated in U.S. dollars was 2.5% to
2.65% above the LIBOR for one-month deposits. Under this facility, the Company could
borrow Canadian denominated dollars, up to U.S. $5.5 million, at an interest rate equal to
2.5% above the Canadian one-month bankers acceptance rates. This asset-based secured
debt facility was repayed in full with proceeds from the Facility entered into in June of
2005.

Borrowings
under the Facility and the previous asset-based senior secured debt facility were $51.5
million at December 31, 2005 versus $69.0 million a year earlier. Available unused
borrowings under the Facility and the previous asset-based senior secured debt facility
were $73.5 million at December 31, 2005 versus $19.3 million a year earlier.

In
October 2005, the Company entered into a $15 million committed line of credit facility
with a commercial bank lender. Borrowings under this facility bear interest at 1.85% above
the London Interbank Offered Rate (LIBOR) for 30 day deposits reset monthly
and are secured by a first priority lien on an assigned pool of retail finance contracts
receivable. This facility expires on April 30, 2006. There were no borrowings outstanding
under this facility at December 31, 2005.

In
addition, the Company has access to a 2.5 million committed foreign short-term
credit facility. Borrowings of 1.5 million were outstanding at a weighted average
interest rate of 3.92% at December 31, 2005 and are included in Other debt obligations
above and short-term debt obligations in the accompanying Consolidated Balance Sheet.

In
December 2004, the Company borrowed $20.2 million on a term basis from a commercial bank
lender. This borrowing had an interest at 2.5% above the LIBOR for three month deposits
reset on a monthly basis. Borrowings were secured by a first priority lien on an assigned
pool of finance contracts receivable. This borrowing was repayed in full during 2005.

Annual
maturities of debt obligations are as follows (in thousands):

|Year  | Maturity Amount
|----- | ---------------
|2006  |                
|2007  |                
|2008  |                
|2009  |                
|2010  |                
|     
|Total |                
|     

Interest
paid on total debt obligations was $5.5 million, $2.8 million and $3.5 million in 2005,
2004 and 2003, respectively.

41

---

# Note 7  Accrued
and Other Current Liabilities

Accrued
and other current liabilities were comprised of the following (in thousands):

|2005                           
|-------------------------------
|Accrued salaries and wages     
|Dealer recourse deposits       
|Accrued warranty costs         
|Accrued product liability costs
|Accrued pension obligations    
|Other                          
|                               
|                               
|                               

In
general, the Company provides warranty coverage on equipment for a period of up to twelve
months. The Companys reserve for warranty claims is established based on the best
estimate of the amounts necessary to settle future and existing claims on products sold as
of the balance sheet date. The Company records warranty expense as a component of selling,
general and administrative expense. While the Companys warranty costs have
historically been within its calculated estimates, it is possible that future warranty
costs could differ from those estimates.

The
changes in the carrying amount of the Companys total product warranty liability for
the years ended December 31, 2005 and 2004 were as follows (in thousands):

|2005                                                                        
|----------------------------------------------------------------------------
|Balance beginning of year                                                   
|Accruals for warranties issued during the period                            
|Accruals related to pre-existing warranties (including changes in estimates)
|Settlements made (in cash or in kind) during the period                     
|                                                                            
|Balance end of year                                                         
|                                                                            

# Note 8  Asset
Impairment and Other Restructuring Costs

On
September 26, 2001, the Company adopted several major plant rationalization initiatives to
improve the Companys profitability by consolidating certain operations. These
initiatives were completed during 2002 as the Company closed its manufacturing facility in
Owatonna, Minnesota (Owatonna) and transferred production of Mustang skid
loaders to the Companys skid loader facility in Madison, South Dakota. In addition,
the Companys manufacturing facility in Lebanon, Pennsylvania (Lebanon)
was closed and the production of certain products formerly manufactured at that facility
was outsourced.

During
the 2003 third quarter, the Company recorded a $3.6 million asset impairment charge to
adjust the carrying value of the Lebanon and Owatonna facilities and assets to their fair
value less cost to sell. Of the $3.6 million charge, $1.2 million and $2.4 million related
to the construction equipment and agricultural equipment segments, respectively. The
Company sold the Lebanon facility in the 2003 fourth quarter and the Owatonna facility in
the 2004 third quarter.

During
the year ended December 31, 2003, the Company expensed $0.5 million of other charges
related to the plant rationalization initiatives. No such charges were expensed in 2005 or
2004.

42

---

# Note 9  Income
Taxes

The
income tax provision recorded for the years ended December 31, 2005, 2004 and 2003
consisted of the following (in thousands):

|Year Ended December 31, | Federal |  | State    |  | Foreign |   | Total  |  
|----------------------- | ------- |  | -------- |  | ------- | - | ------ | -
|2005                    |         |  | Current  |  |         | $ | 9,051  |  
|                        |         |  | Deferred |  |         |   | (206   | )
|                       
|                        |         |  | Total    |  |         | $ | 8,845  |  
|                       
|2004                    |         |  | Current  |  |         | $ | 6,015  |  
|                        |         |  | Deferred |  |         |   | (1,058 | )
|                       
|                        |         |  | Total    |  |         | $ | 4,957  |  
|                       
|2003                    |         |  | Current  |  |         | $ | (1,329 | )
|                        |         |  | Deferred |  |         |   | 1,350  |  
|                       
|                        |         |  | Total    |  |         | $ | 21     |  
|                       

Consolidated
domestic income before income taxes was $27.7 million, $16.4 million and $2.0 million for
2005, 2004 and 2003, respectively. Foreign income before income taxes was $5.1 million,
$3.6 million and $1.4 million for 2005, 2004 and 2003, respectively.

A
reconciliation between the reported income tax provision and the federal statutory rate
follows (as a percent of pre-tax income):

|                                                     | 2005
|---------------------------------------------------- | ----
|Federal statutory rate                               |     
|State income taxes, net of Federal income tax effect |     
|Foreign export sale benefit and other tax credits    |     
|Foreign rate differential                            |     
|Finalization of prior year tax returns               |     
|Other, net                                           |     
|                                                    
|                                                     |     
|                                                    

43

---

The
Companys temporary differences and carryforwards which give rise to deferred tax
assets and liabilities consisted of the following (in thousands):

|2005                         
|-----------------------------
|Accrued expenses and reserves
|Asset valuation reserves     
|Pension benefits             
|Operating loss carryforwards 
|Tax credit carryforwards     
|Property, plant and equipment
|Other, net                   
|Valuation allowance          
|                             
|Net deferred tax asset       
|                             

The
net deferred tax asset is included in the consolidated balance sheet in the following
captions (in thousands):

|2005                           
|-------------------------------
|Deferred income tax assets     
|Deferred income tax liabilities
|                               
|                               
|                               

At
December 31, 2005, the Company had state net operating loss carryforwards of $16.4 million
and state tax credits of $0.3 million available for the reduction of future income tax
liabilities. Both the state net operating loss carryforwards and state tax credits will
expire at various dates between 2007 and 2024. A valuation allowance has been recorded
against these carryforwards and credits for which utilization is uncertain.

Cash
paid (received) related to income taxes during 2005, 2004 and 2003 was $11.7 million, $3.8
million and $(3.0) million, respectively.

# Note 10  Employee
Retirement Plans

The
Company sponsors two qualified defined benefit pension plans for certain of its employees.
The following schedules set forth a reconciliation of the changes in the plans
benefit obligation and fair value of plan assets and a statement of the funded status (in
thousands):

|2005                                 
|-------------------------------------
|Reconciliation of benefit obligation:
|Obligation at beginning of year      
|Service cost                         
|Interest cost                        
|Actuarial loss                       
|Benefit payments                     
|                                     
|Obligation                           
|                                     

44

---

|2005                                              
|--------------------------------------------------
|Reconciliation of fair value of plan assets:      
|Fair value of plan assets at beginning of year    
|Actual return on plan assets                      
|Employer contributions                            
|Benefit payments                                  
|                                                  
|Fair value of plan assets                         
|                                                  
|Funded Status:                                    
|Funded status at end of year                      
|Unrecognized prior service cost                   
|Unrecognized loss                                 
|                                                  
|Net amount recognized                             
|Employer contributions paid between 10/1 and 12/31
|                                                  
|Net amount recognized at December 31              
|                                                  

The
following table provides the amounts recognized in the balance sheet (in thousands):

|2005                                
|------------------------------------
|Prepaid benefit cost                
|Intangible asset                    
|Minimum pension liability           
|Accumulated other comprehensive loss
|                                    
|Net amount recognized at December 31
|                                    

The intangible
asset amount is included in non-current other assets. Of the liability amount, $0.9
million (expected fiscal 2006 funding requirement) is included in accrued and other
current liabilities. The net amount of the prepaid benefit cost and the non-current
portion of the minimum pension liability is included in other long-term liabilities. The
amount included within other comprehensive income (loss) arising from a change in the
minimum pension liability was $1.4 million and $1.8 million for the years ended December
31, 2005 and 2004, respectively.

The
projected benefit obligation, accumulated benefit obligation, and fair value of plan
assets for the plans having accumulated benefit obligations in excess of plan assets were
$52.1 million, $48.9 million and $43.7 million and $49.4 million, $46.7 million and $40.8
million as of December 31, 2005 and 2004, respectively.

The
assumptions used in the measurement of the Companys benefit obligation are shown in
the following table:

|                                                 | 2005
|------------------------------------------------ | ----
|Weighted-average assumptions as of September 30: |     
|Discount rate                                    |     
|Rate of compensation increase                    |     
|                                                

45

---

The
following table provides disclosure of the net periodic benefit cost (in thousands):

|2005                              
|----------------------------------
|Service cost                      
|Interest cost                     
|Expected return on plan assets    
|Amortization of prior service cost
|Amortization of net loss          
|                                  
|Net periodic benefit cost         
|                                  

The assumptions
used in the measurement of the Companys net periodic benefit cost for the years
ended December 31, 2005, 2004 and 2003 are shown in the following table:

|2005                                            
|------------------------------------------------
|Weighted-average assumptions as of September 30:
|Discount rate                                   
|Expected long-term return on plan assets        
|Rate of compensation increase                   
|                                                

The
Companys approach used to determine the expected long-term rate of return on plan
assets assumption is based on weighting historical market index returns for various asset
classes in proportion to the assets held in the Gehl Pension Master Trust
(Trust). Typically, the Trust holds approximately 60% of assets in equity
securities and 40% in fixed income securities. Weighting 10-year compounded trailing
returns on equity and fixed income indices in proportion to the above asset mix yields an
expected long-term return of 9.00%. However, recent unsettled market conditions have
caused management to add a degree of conservatism in the long-term rate of return
assumption, which has been set at 8.75%.

The
following table provides disclosure of the weighted-average asset allocations and future
target allocations as of the respective measurement dates:

|                        
|------------------------
|Asset category:         
|Equity securities       
|Debt securities and cash
|Real estate             
|Other                   
|                        
|                        
|                        

As
manager of plan assets, the Investment Committee (Committee) believes that it
must prudently invest pension assets in a manner that attempts to meet the actuarial
long-term rate of return. At the same time, the Committee adheres to three overriding
responsibilities  to safeguard plan assets, to optimize returns, and to diversify
assets. The Committee retains investment specialists as a means to optimize the total
expected portfolio return. Although all day-to-day investment, custodial, and
administrative responsibilities are delegated to the investment specialists, the Committee
maintains an active role in matters relating to asset allocation and general asset
management.

46

---

Estimated
future benefit payments, which reflect expected future service, are as follows (in
thousands):

|                 
|-----------------
|
|2006             
|2007             
|2008             
|2009             
|2010             
|Years 2011 - 2015
|                 

The
measurement date used for each of the actuarial calculations was September 30.

In
addition, the Company maintains an unfunded non-qualified supplemental retirement benefit
plan for certain management employees. The following schedules set forth a reconciliation
of the changes in the plans benefit obligation and a statement of the funded status
(in thousands):

|2005                                 
|-------------------------------------
|Reconciliation of benefit obligation:
|Obligation at beginning of year      
|Service cost                         
|Interest cost                        
|Actuarial loss                       
|Plan amendments                      
|Benefit payments                     
|                                     
|Obligation                           
|                                     
|Funded Status:                       
|Funded status at end of year         
|Unrecognized prior service cost      
|Unrecognized loss                    
|                                     
|Net amount recognized at December 31 
|                                     

The
following table provides the amounts recognized in the balance sheet (in thousands):

|2005                                
|------------------------------------
|Intangible asset                    
|Accrued benefit liability           
|Minimum pension liability           
|Accumulated other comprehensive loss
|                                    
|Net amount recognized at December 31
|                                    

The intangible
asset amounts are included in non-current other assets. The accrued benefit liability and
minimum pension liability amounts are included in other long-term liabilities. The amount
included within other comprehensive loss arising from a change in the accrued benefit
liability was $(0.3) million and $1.1 million for the years ended December 31, 2005 and
2004, respectively.

47

---

The
projected benefit obligation, accumulated benefit obligation, and fair value of the plan
assets having accumulated benefit obligations in excess of plan assets were $6.2 million,
$5.7 million and $0 and $5.4 million, $5.3 million and $0 as of December 31, 2005 and
2004, respectively.

The
assumptions used in the measurement of the Companys benefit obligation are as
follows:

|                                                | 2005
|----------------------------------------------- | ----
|Weighted-average assumptions as of December 31: |     
|Discount rate                                   |     
|Rate of compensation increase                   |     
|                                               

The
following table provides disclosure of the net periodic benefit cost (in thousands):

|2005                              
|----------------------------------
|Service cost                      
|Interest cost                     
|Amortization of prior service cost
|Amortization of net loss          
|                                  
|Net periodic benefit cost         
|                                  

The assumptions
used in the measurement of the Companys net periodic benefit cost for the years
ended December 31, 2005, 2004 and 2003 are shown in the following table:

|2005                                           
|-----------------------------------------------
|Weighted-average assumptions as of December 31:
|Discount rate                                  
|Rate of compensation increase                  
|                                               

Estimated
future benefit payments, which reflect expected future service, are as follows (in
thousands):

|                  | 
|----------------- | 
|2006              | 
|2007              | 
|2008              | 
|2009              | 
|2010              | 
|Years 2011 - 2015 | 
|                 

The
Company maintains a Rabbi Trust containing $5.0 million and $4.9 million of assets
designated for the non-qualified supplemental retirement benefit plan as of December 31,
2005 and 2004, respectively. The assets of the Rabbi Trust are invested in equity
securities and variable life insurance policies.

The
Company maintains a savings and profit sharing plan. The Company matches 50% of
non-bargaining unit employee contributions to the plan not to exceed 6% of an
employees annual compensation. Vesting of Company contributions occur at the rate of
20% per year and totaled approximately $729,000, $618,000 and $493,000 in 2005, 2004 and
2003, respectively.

48

---

The
Company maintains a defined contribution plan that covers certain employees not covered by
a defined benefit plan. The Company contributes various percentages of eligible employee
compensation (as defined) and the plan does not allow employee contributions. The Company
contributed approximately $476,000, $337,000 and $287,000 in connection with this plan in
2005, 2004 and 2003, respectively.

The
Company provides post employment benefits to certain retirees in two areas: a $2,500 life
insurance policy for retired office employees and subsidized health insurance benefits for
early retirees prior to their attaining age 65. The number of retirees associated with
post employment benefit costs is approximately 235.

The
following schedules set forth a reconciliation of the changes in the post employment
plans benefit obligation and a statement of the funded status (in thousands):

|2005                                 
|-------------------------------------
|Reconciliation of benefit obligation:
|Obligation at beginning of year      
|Service cost                         
|Interest cost                        
|Actuarial loss                       
|Benefit payments                     
|                                     
|Obligation                           
|                                     
|Funded Status:                       
|Funded status at end of year         
|Unrecognized transition obligation   
|Unrecognized loss                    
|                                     
|Net amount recognized at December 31 
|                                     

The
discount rate used in determining the accumulated post employment obligation was 5.75% and
6.00% as of the measurement dates of December 31, 2005 and 2004, respectively.

The
following table provides disclosure of the net periodic benefit cost (in thousands):

|2005                                 
|-------------------------------------
|Service cost                         
|Interest cost                        
|Amortization of transition obligation
|Amortization of net loss             
|                                     
|Net periodic benefit cost            
|                                     

The discount
rate used in determining the net periodic benefit cost was 6.00%, 6.25% and 6.75% for
2005, 2004 and 2003, respectively. The assumed health care cost rate trend used in
measuring the accumulated post employment benefit obligation at December 31, 2005 was 9%
decreasing to 5% over five years and at December 31, 2004 was 10% decreasing to 5% in five
years.

49

---

Assumed
health care cost trend rates have a significant effect on the amounts reported for the
health care plans. A 1% change in assumed health care cost trend rates would have the
following effects (in thousands):

|                                                               
|---------------------------------------------------------------
|Effect on total of service and interest  cost components of net
|periodic post employment health care benefit cost              
|Effect on the health care component of the accumulated post    
|employment benefit obligation                                  
|                                                               

Estimated
future benefit payments, which reflect expected future service, are as follows (in
thousands):

|                 
|-----------------
|
|2006             
|2007             
|2008             
|2009             
|2010             
|Years 2011 - 2015
|                 

# Note 11 
Shareholders Equity

On
September 26, 2005, the Company completed a public offering of 2,395,000 shares of its
common stock at a price to the public of $28.12. The offering included 1,748,125 primary
shares sold by the Company and 646,875 secondary shares sold by one selling shareholder,
Neuson Finance GmbH. The Company received approximately $46.1 million in net proceeds from
the sale of shares by it in the offering, after deducting underwriting discounts,
commissions and expenses. The Company used the net proceeds it received from the offering
to repay debt outstanding under its credit facility.

On
July 22, 2005, the Company declared a three-for-two common stock split in the form of a
50% stock dividend with a record date of August 10, 2005, and a payment date of August 24,
2005. The purpose of the stock dividend was to create additional market liquidity for the
Companys common stock and, thus, enhance shareholder value. The information in this
Annual Report on Form 10-K has been adjusted to reflect the stock split.

During
April 2004, the 2004 Equity Incentive Plan was adopted, which authorizes the granting of
awards for up to 412,500 shares of the Companys common stock. During April 2000, the
2000 Equity Incentive Plan was adopted, which authorizes the granting of awards for up to
812,771 shares of the Companys common stock. An award is defined within the 2004 and
2000 Equity Incentive Plan as a stock option, stock appreciation right, restricted stock
or performance share. In April 1996, the 1995 Stock Option Plan was adopted, which
authorizes the granting of options for up to 726,627 shares of the Companys common
stock. These plans provide that options be granted at an exercise price not less than fair
market value on the date the options are granted and that the options generally vest
ratably over a period not exceeding three years after the grant date. The option period
may not be more than ten years after the grant date.

50

---

Following
is a summary of option activity in the equity incentive plans for 2003, 2004 and 2005:

|                              
|------------------------------
|Outstanding, January 1, 2003  
|Granted                       
|Exercised                     
|Cancelled                     
|                              
|Outstanding, December 31, 2003
|                              
|Granted                       
|Exercised                     
|Cancelled                     
|                              
|Outstanding, December 31, 2004
|                              
|Granted                       
|Exercised                     
|Cancelled                     
|                              
|Outstanding, December 31, 2005
|                              

In
2005, 2004 and 2003, the Company awarded stock options to certain key employees. Awards of
stock options under the plans are subject to certain vesting requirements. There were
24,000, 167,475 and 162,751 stock options awarded in 2005, 2004 and 2003, respectively,
with an average fair market value of $13.90, $11.02 and $6.33 per share, respectively.

Options
outstanding for the plans at December 31, 2005 were as follows:

|Range of Exercise Prices | Outstanding at
December 31, 2005 | Weighted Average
Remaining Contractual
Life (years) | Weighted Average
Exercise Price
per Share
|------------------------ | -------------------------------- | --------------------------------------------------- | -----------------------------------------
|$     5.00-$8.99         | 192,010                          | 5.73                                                | $  7.09                                  
|$   9.00-$12.99          | 427,878                          | 6.06                                                | $10.23                                   
|$ 13.00-$19.99           | 181,943                          | 7.61                                                | $16.46                                   

Options exercisable
under the plans at December 31, 2005 were as follows:

|Range of Exercise Prices | Exercisable Shares | Weighted Average
Exercise Price
per Share
|------------------------ | ------------------ | -----------------------------------------
|$     5.00-$8.99         | 186,070            | $  7.14                                  
|$   9.00-$12.99          | 363,947            | $10.23                                   
|$ 13.00-$19.99           | 75,885             | $15.32                                   

51

---

In
2005 and 2004, the Company awarded restricted shares under the 2004 Equity Incentive Plan
to certain key employees. Awards of restricted stock under the plan are subject to certain
vesting requirements. There were 5,250 and 42,728 restricted shares awarded in 2005 and
2004, respectively, with an average fair market value of $29.05 and $15.83 per share.
Compensation expense related to restricted stock awards is based upon the market price at
the date of award and is charged to earnings over the vesting period. Compensation expense
related to the awarding of restricted shares was $232,000 and $15,000 for 2005 and 2004,
respectively.

On
July 22, 2004, in conjunction with the establishment of a strategic alliance with Manitou
BF S.A. (Manitou), the worlds largest manufacturer of telescopic
handlers, the Company issued 1,442,652 shares of common stock to Manitou at an aggregate
purchase price of $19.8 million. The proceeds from the sale of the common stock were used
to pay down the Companys line of credit facility.

In
September 2001, the Companys Board of Directors authorized a stock repurchase plan
providing for the repurchase of up to 500,000 shares of the Companys outstanding
common stock. The Company did not repurchase any shares during 2005 or 2004. The Company
repurchased 110,550 shares in the open market under this authorization at a cost of
$729,000 during 2003. As of December 31, 2005, the Company has repurchased an aggregate of
227,850 shares under the authorization. All treasury stock acquired by the Company has
been cancelled and returned to the status of authorized but unissued shares.

On
May 28, 1997, the Board of Directors of the Company adopted a Shareholder Rights Plan and
declared a rights dividend of two-thirds preferred share purchase right
(Right) for each share of common stock outstanding on June 16, 1997, and
provided that two-thirds Right would be issued with each share of common stock thereafter
issued. The Shareholder Rights Plan provides that in the event a person or group acquires
or seeks to acquire 15% or more of the outstanding common stock of the Company, the
Rights, subject to certain limitations, will become exercisable. Each Right, once
exercisable, initially entitles the holder thereof (other than the acquiring person, whose
rights are cancelled) to purchase from the Company one one-hundredth of a share of Series
A preferred stock at an initial exercise price of $55 per one one-hundredth of a share
(subject to adjustment), or, upon the occurrence of certain events, common stock of the
Company or common stock of an acquiring company having a market value
equivalent to two times the exercise price. Subject to certain conditions, the Rights are
redeemable by the Board of Directors for $.01 per Right and are exchangeable for shares of
common stock. The Rights have no voting power and expire on May 28, 2007.

# Note 12  Financial
Instruments

The
Company selectively uses interest rate swaps and foreign currency forward contracts to
reduce market risk associated with changes in interest rates and the value of the U.S
Dollar versus the Euro. The use of derivatives is restricted to those intended for hedging
purposes.

During
2005, the Company was party to three interest rate swap agreements (swaps)
that were put in place as hedges protecting against underlying changes in interest rates
and their impact on the gains / losses incurred upon the sale of finance contracts
receivable. Accordingly, the implied gains / losses associated with the fair values of
interest rate swaps would be offset by gains / losses on the sale of the underlying retail
finance contracts. Under the swaps, the Company received interest on a variable LIBOR for
one-month deposits and paid on a fixed rate ranging from of 3.18% to 3.41%. Although the
Company continued to own finance contracts during the term of the swaps, under the
provisions of SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, the swaps were deemed ineffective as of April 2, 2005 as the finance
contracts that were owned by the Company at the inception of the swaps had been sold
during the three-month period ended April 2, 2005. As a result, the Company recorded $1.1
million of other income in the three-month period ended April 2, 2005. The Company
terminated the swaps during the three-month period ended July 2, 2005 and recorded $0.7
million of other expense during such period resulting in a realized net gain of $0.4
million.

In
May 2005, the Company entered into a series of forward currency contracts (forward
contracts) to hedge a portion of the Companys exposure to changes in the value
of the U.S Dollar versus the Euro during 2005 as a result of Euro purchase commitments.
All of the forward contracts the Company entered into expired during 2005 resulting in a
realized loss of $0.3 million.

52

---

# Note 13  Net
Income Per Share

Basic
net income per common share is computed by dividing net income by the weighted-average
number of common shares outstanding for the period. Diluted net income per common share is
computed by dividing net income by the weighted-average number of common shares and, if
applicable, common stock equivalents which would arise from the exercise of stock options
and vesting of restricted stock. A reconciliation of the shares used in the computation is
as follows (in thousands):

|2005                                  
|--------------------------------------
|Basic shares                          
|Effect of options and restricted stock
|                                      
|Diluted shares                        
|                                      

# Note 14  Leases

The
Company uses certain equipment under operating lease arrangements. Rent expense under such
arrangements amounted to $2,037,000, $1,732,000 and $1,447,000 in 2005, 2004 and 2003,
respectively.

The
Company maintains non-cancelable operating leases for certain equipment. Future minimum
lease payments under such leases at December 31, 2005 are as follows (in thousands):

|           | 
|---------- | 
|2006       | 
|2007       | 
|2008       | 
|2009       | 
|2010       | 
|Thereafter | 
|          
|Total      | 
|          

# Note 15 
Contingencies

The
Company is involved in litigation of which the ultimate outcome and liability to the
Company, if any, is not presently determinable. Management believes that final disposition
of such litigation will not have a material impact on the Companys results of
operations or financial position.

# Note 16  Segment
Information

The
Company has two segments, construction equipment and agricultural equipment, as the
long-term financial performance of these segments is affected by separate economic
conditions and cycles. Segment net sales and income (loss) from operations tend to be
aligned with the distribution networks of the Company, and correlate with the manner in
which the Company evaluates performance.

Construction
equipment is manufactured and distributed for customers in the construction market.
Products include a diversified offering of skid loaders, telescopic handlers, compact
excavators, compact track loaders, all-wheel-steer loaders, compact mini-loaders, paving
equipment and attachments. As of December 31, 2005, 68% of the Companys accounts
receivable were from customers in the construction equipment segment.

Agricultural
equipment is manufactured and distributed primarily for customers in the dairy, livestock
and poultry agricultural sectors. The products are comprised primarily of skid loaders,
compact track loaders and equipment for haymaking, forage harvesting, feedmaking, manure
handling and attachments. As of December 31, 2005, 32% of the Companys accounts
receivable were from customers in the agricultural equipment segment.

53

---

Unallocated
assets are cash, deferred income taxes and other assets not identified with the
Companys segments. Segments of business are presented below (in thousands):

|2005                         
|-----------------------------
|Net Sales                    
|                             
|                             
|                             
|                             
|Income (Loss) from Operations
|                             
|                             
|                             
|                             
|Assets (year-end)            
|                             
|                             
|                             
|                             
|                             
|Depreciation/Amortization    
|                             
|                             
|                             
|                             
|                             
|Capital Expenditures         
|                             
|                             
|                             
|                             

Of
the Companys total net sales, $76.4 million, $57.0 million and $50.5 million were
made to customers residing outside of the United States in 2005, 2004 and 2003,
respectively.

# Note 17 
Subsequent Event

In
February 2006, the Company terminated the asset securitization program with the Purchaser
(see Note 3). The Company and a third party financial institution are in negotiations with
respect to a new finance contract receivable securitization facility that would allow the
Company to sell up to $300 million in finance contracts receivable through a revolving
facility. The Company anticipates having this enhanced asset securitization program in
place by the end of the first quarter of 2006.

54

---

# Note 18  Quarterly
Financial Data (unaudited)

|In Thousands, Except Per Share Data -       | First
Quarter |  | Second
Quarter |         | Third
Quarter |   | Fourth
Quarter |  | Total |        
|------------------------------------------- | ------------- |  | -------------- | ------- | ------------- | - | -------------- |  | ----- | -------
|2005                                        |               |  |                |         |               |   |                |  |       |        
|Net sales                                   |               |  | $              | 119,041 |               | $ | 138,201        |  | $     | 112,310
|Gross profit                                |               |  |                | 23,541  |               |   | 26,946         |  |       | 21,722 
|Net income                                  |               |  |                | 4,924   |               |   | 5,622          |  |       | 5,058  
|Diluted net income per common share         |               |  |                | .47     |               |   | .53            |  |       | .47    
|Basic net income per common share1          |               |  |                | .49     |               |   | .55            |  |       | .49    
|                                           
|2004                                        |               |  |                |         |              
|Net sales                                   |               |  | $              | 84,687  |               | $ | 95,499         |  | $     | 87,470 
|Gross profit                                |               |  |                | 17,396  |               |   | 19,027         |  |       | 17,925 
|Net income (loss)                           |               |  |                | 2,905   |               |   | 3,915          |  |       | 3,640  
|Diluted net income (loss) per common share1 |               |  |                | .35     |               |   | .46            |  |       | .38    
|Basic net income (loss) per common share1   |               |  |                | .36     |               |   | .48            |  |       | .39    
|                                           

1 Due to the use of the
weighted-average shares outstanding each quarter for computing net income per share, the
sum of the quarterly per share amounts does not equal the per share amount for the year.

55

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GEHL COMPANY AND
SUBSIDIARIESSCHEDULE II  VALUATION AND QUALIFYING ACCOUNTS    (in thousands)

|Period            | Description | Balance at
Beginningof Year | Charged to
Costs andExpenses | Deductions | Balance atEnd of Year
|----------------- | ----------- | --------------------------- | ---------------------------- | ---------- | ---------------------
|Year Ended        |             |                             |                              |            |                      
|December 31, 2003 |             |                            
|                  |             |                             | Allowance for Doubtful       |            |                      
|                  |             |                             | Accounts-Trade               |            |                      
|                  |             |                             | Receivables                  |            |                      
|                  |             |                             | Returns and Dealer           |            |                      
|                  |             |                             | Discounts                    |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Total                        |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Allowance for Doubtful       |            |                      
|                  |             |                             | Accounts - Retail            |            |                      
|                  |             |                             | Contracts                    |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Inventory                    |            |                      
|                  |             |                             | Obsolescence Reserve         |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Income Tax                   |            |                      
|                  |             |                             | Valuation Allowance          |            |                      
|                  |             |                             |                              |            |                      
|Year Ended        |             |                            
|December 31, 2004 |             |                            
|                  |             |                             | Allowance for Doubtful       |            |                      
|                  |             |                             | Accounts-Trade               |            |                      
|                  |             |                             | Receivables                  |            |                      
|                  |             |                             | Returns and Dealer           |            |                      
|                  |             |                             | Discounts                    |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Total                        |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Allowance for Doubtful       |            |                      
|                  |             |                             | Accounts - Retail            |            |                      
|                  |             |                             | Contracts                    |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Inventory                    |            |                      
|                  |             |                             | Obsolescence Reserve         |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Income Tax                   |            |                      
|                  |             |                             | Valuation Allowance          |            |                      
|                  |             |                             |                              |            |                      
|Year Ended        |             |                            
|December 31, 2005 |             |                            
|                  |             |                             | Allowance for Doubtful       |            |                      
|                  |             |                             | Accounts-Trade               |            |                      
|                  |             |                             | Receivables                  |            |                      
|                  |             |                             | Returns and Dealer           |            |                      
|                  |             |                             | Discounts                    |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Total                        |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Allowance for Doubtful       |            |                      
|                  |             |                             | Accounts - Retail            |            |                      
|                  |             |                             | Contracts                    |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Inventory                    |            |                      
|                  |             |                             | Obsolescence Reserve         |            |                      
|                  |             |                             |                              |            |                      
|                  |             |                             | Income Tax                   |            |                      
|                  |             |                             | Valuation Allowance          |            |                      
|                  |             |                             |                              |            |                      

56

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# Item 9. Changes in and
Disagreements with Accountants on Accounting and Financial Disclosure

There
have been no changes in or disagreements with the Companys accountants regarding
accounting and financial disclosure required to be reported pursuant to this item.

# Item 9A. Controls and
Procedures

# Disclosure Controls and
Procedures

The
Companys management, with the participation of the Companys principal
executive officer and principal financial officer, has evaluated the Companys
disclosure controls and procedures as of December 31, 2005. Based upon that evaluation,
the Companys principal executive officer and principal financial officer have
concluded that the Companys disclosure controls and procedures were effective as of
December 31, 2005.

# Managements Annual
Report on Internal Control Over Financial Reporting

The
report of management required under this Item 9A is contained in Item 8 of this Annual
Report on Form 10-K under the caption Managements Annual Report on Internal
Control Over Financial Reporting.

# Report of Independent
Registered Public Accounting Firm

The
report under this Item 9A is contained in Item 8 of this Annual Report on Form 10-K under
the caption Report of Independent Registered Public Accounting Firm.

# Changes in Internal
Control Over Financial Reporting

There
was no change in the Companys internal control over financial reporting (as such
term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred
during the quarter ended December 31, 2005 that has materially affected, or is reasonably
likely to materially affect, the Companys internal control over financial reporting.

# Item 9B. Other
Information

The
Company has no other information to report pursuant to Item 9B.

# PART III

# Item 10. Directors and
Executive Officers of the Registrant

Pursuant
to Instruction G, the information required by this item with respect to directors is
hereby incorporated herein by reference from the captions entitled Election of
Directors and Board of Directors set forth in the Companys
definitive Proxy Statement for its 2005 Annual Meeting of Shareholders (Proxy
Statement)(1). Information with respect to executive officers of the
Company appears at the end of Part I, on Page 12 and 13, of this Form 10-K. Pursuant to
Instruction G, the information required by this item with respect to compliance with
Section 16(a) of the Securities Exchange Act of 1934 is hereby incorporated by reference
from the caption entitled Other Matters  Section 16(a) Beneficial Ownership
Reporting Compliance set forth in the Proxy Statement.

The
Company has adopted a Code of Business Conduct and Ethics that applies to all of the
Companys employees, including the Companys Chief Executive Officer and Chief
Financial Officer. The Company has posted a copy of the Code of Business Conduct and
Ethics on its website at www.gehl.com. The Company intends to satisfy the
disclosure requirements under Item 10 of Form 8-K regarding amendments to, or waivers
from, the Code of Business Conduct and Ethics by posting such information on its website
at www.gehl.com. The Company is not including the information contained on its
website as part of, or incorporating it by reference into, this report.

57

---

# Item 11. Executive
Compensation

Pursuant
to Instruction G, the information required by this item is hereby incorporated herein by
reference from the captions entitled Board of Directors and Executive
Compensation set forth in the Proxy Statement; provided, however, that the
subsection entitled Executive Compensation  Report on Executive
Compensation shall not be deemed to be incorporated herein by reference.

# Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Pursuant
to Instruction G, the information required by this item with respect to security ownership
of certain beneficial owners and management is hereby incorporated by reference herein
from the caption Principal Shareholders set forth in the Proxy Statement.

The
following table sets forth information with respect to compensation plans under which
equity securities of the Company are authorized for issuance.

|                         
|-------------------------
|Plan category            
|Equity compensation plans
|approved by security     
|holders                  
|                         
|Equity compensation plans
|not approved by security 
|holders                  
|                         
|Total                    
|                         

| | (1) | Represents
options to purchase the Companys Common Stock granted under the
               Companys 2004 Equity Incentive Plan, 2000 Equity Incentive Plan and
1995                Stock Option Plan, each of which was approved by the Companys
               shareholders.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Includes
up to 71,515 shares of restricted Common Stock that can be issued under
               the Companys 2004 Equity Incentive Plan. These shares are subject to
a                minimum three year vesting period.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Item 13. Certain
Relationships and Related Transactions

Pursuant
to Instruction G, the information required by this item is hereby incorporated herein by
reference from the caption entitled Other Matters  Certain Transactions
set forth in the Proxy Statement.

# Item 14. Principal
Accountant Fees and Services

The
information required by this item is hereby incorporated by reference from the captions
entitled Audit Committee Report and Approval of Selection of the
Independent Registered Public Accounting Firm set forth in the Proxy Statement.

---

|1 | The
Proxy Statement will be filed with the Commission pursuant to Regulation 14A.
|- | ---------------------------------------------------------------------------------

58

---

# PART IV

# Item 15. Exhibits and
Financial Statement Schedules

| | (a) | 1
and 2. Financial statements and financial statement schedule.
| | --- | ---------------------------------------------------------------

| | Reference
is made to the separate index to the Companys consolidated financial statements and
schedule contained in Part II, Item 8 of this Form 10-K.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3.
Exhibits.
| | ------------

| | Reference
is made to the separate exhibit index contained on Pages 60 through 63 hereof.
| | ----------------------------------------------------------------------------------------

# SIGNATURES

Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|                    |                                   
|------------------- | ----------------------------------
|                    | GEHL COMPANY                      
|Date: March 3, 2006 | By  /s/ William D. Gehl           
|                    | William D. Gehl,                  
|                    | Chairman of the Board of Directors
|                    | and Chief Executive Officer       

Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities and on
the dates indicated.

|Signature               | Title                                        | Date         
|----------------------- | -------------------------------------------- | -------------
|/s/ William D. Gehl     | Chairman of the Board of Directors,          | March 3, 2006
|William D. Gehl         | Chief Executive Officer and Director        
|                        | (Principal Executive Officer)               
|/s/ Thomas M. Rettler   | Vice President and Chief Financial Officer   | March 3, 2006
|Thomas M. Rettler       | (Principal Financial and Accounting Officer)
|/s/ Nicholas C. Babson  | Director                                     | March 3, 2006
|Nicholas C. Babson     
|/s/ Thomas J. Boldt     | Director                                     | March 3, 2006
|Thomas J. Boldt        
|/s/ Marcel-Claude Braud | Director                                     | March 3, 2006
|Marcel-Claude Braud    
|/s/ John T. Byrnes      | Director                                     | March 3, 2006
|John T. Byrnes         
|/s/ Richard J. Fotsch   | Director                                     | March 3, 2006
|Richard J. Fotsch      
|/s/ John W. Splude      | Director                                     | March 3, 2006
|John W. Splude         
|/s/ Dr. Hermann Viets   | Director                                     | March 3, 2006
|Dr. Hermann Viets      

59

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# GEHL COMPANYINDEX TO
EXHIBITS

|Exhibit Number | Document
Description
|-------------- | --------------------

|(3.1) | Restated
Articles of Incorporation, as amended, of Gehl Company [Incorporated by
               reference to Exhibit 3.1 to the Companys Quarterly Report on Form
10-Q for                the quarter ended June 28, 1997]
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3.2) | By-laws
of Gehl Company, as amended [Incorporated by reference to Exhibit 3.2 to
               the Companys Current Report on Form 8-K filed on March 1, 2006].
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3.3) | Rights
Agreement, dated as of May 28, 1997, between Gehl Company and U.S. Bank
               National Association (as successor to Firstar Trust Company) [Incorporated
by                reference to Exhibit 4.1 to the Companys Registration Statement
on Form                8-A, dated as of May 28, 1997]
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.1) | Amendment
to Rights Agreement, dated as of September 20, 2002 by and among U.S.                Bank
National Association, Gehl Company and American Stock Transfer and Trust
               Company [Incorporated by reference to Exhibit 4.1 of the Companys
               Quarterly Report on Form 10-Q for the quarter ended September 28, 2002]
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.2) | Credit
Agreement by and among Gehl Company, Compact Equipment Attachments Inc.,
               Gehl Power Products, Inc., Mustang Manufacturing Company, Inc., Harris,
N.A.,                JPMorgan Chase Bank, N.A., LaSalle Bank National Association, Wells
Fargo Bank,                National Association and M&I Marshall & Ilsley Bank,
dated June 3, 2005.                [Incorporated by reference to Exhibit 10.1 to the
Companys Current Report                on Form 8-K filed on June 9, 2005.]
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.3) | Security
Agreement by and among Gehl Company, Compact Equipment Attachments                Inc.,
Gehl Power Products, Inc., Mustang Manufacturing Company, Inc., Harris,
               N.A., as agent, dated June 3, 2005. [Incorporated by reference to Exhibit
10.2                to the Companys Current Report on Form 8-K filed on June 9,
2005.]
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4.4) | Shareholder
and Registration Rights Agreement, dated as of August 23, 2005, by                and
among Gehl Company, Neuson Finance GmbH and Neuson Kramer Baumaschinen AG.
               [Incorporated by reference to Exhibit 4.1 to the Companys Current
Report                on Form 8-K filed on August 23, 2005.]
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.1)* | Form
of  Supplemental  Retirement  Benefit  Agreement  between  Gehl Company and Messrs.
 Keyes,  Miller,  on Form 10-Q for the quarter ended July 1, 2000]
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.2)* | Gehl
Company Director Stock Grant Plan, as amended [Incorporated by reference to Exhibit 10.9
to the Companys Quarterly Report on Form 10-Q for the quarter ended July 1, 2000]
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.3)* | Employment
Agreement by and between Gehl Company and William D. Gehl dated as of June 14, 2004
(executed as of July 30, 2004) [Incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q for the quarter ended September 25, 2004]
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.4)* | Supplemental
Retirement Benefit Agreement by and between William D. Gehl and Gehl Company
[Incorporated by reference to Exhibit 10.4 of the Companys Annual Report on Form
10-K for the year ended December 31, 1995]
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.5)* | Amendment
to Supplemental Retirement Benefit Agreement by and between William D. Gehl and Gehl
Company dated as of April 20, 2000 [Incorporated by reference to Exhibit 10.6 of the
Companys Quarterly Report on Form 10-Q for the quarter ended July 1, 2000]
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

60

---

|(10.6)* | Gehl
Savings Plan, as amended and restated effective July 1, 2001 [Incorporated by reference
to Exhibit 10.1 of the Companys Quarterly Report on Form 10-Q for the quarter ended
September 29, 2001]
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.7)* | Amendment
to Gehl Savings Plan [Incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q for the quarter ended March 30, 2002]
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.8)* | Amendment
to Gehl Savings Plan [Incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q for the quarter ended June 29, 2002]
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.9)* | Amendment
to Gehl Savings Plan [Incorporated by reference to Exhibit 10.1 of the Companys
Quarterly Report on Form 10-Q for the quarter ended September 27, 2003]
|------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.10)* | Gehl
Company Retirement Income Plan B, as amended and restated [Incorporated by
reference to Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q for the
quarter ended September 29, 2001]
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.11)* | Amendments
to Gehl Company Retirement Income Plan B [Incorporated by reference to
Exhibit 10.2 of the Companys Quarterly Report on Form 10-Q for the quarter ended
June 29, 2002]
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.12)* | Gehl
Company 1995 Stock Option Plan, as amended [Incorporated by reference to Exhibit 10.1 to
the Companys Quarterly Report on Form 10-Q for the quarter ended July 1, 2000]
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.13)* | Form
of Stock Option Agreement for executive officers used in conjunction with the Gehl
Company 1995 Stock Option Plan [Incorporated by reference to Exhibit 10.12 of the Companys
Annual Report on Form 10-K for the year ended December 31, 1995]
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.14)* | Form
of Stock Option Agreement for non-employee directors used in conjunction with the Gehl
Company 1995 Stock Option Plan [Incorporated by reference to Exhibit 10.13 of the Companys
Annual Report on Form 10-K for the year ended December 31, 1995]
|-------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.15)* | Gehl
Company 2000 Equity  Incentive Plan  [Incorporated  by reference to Appendix A to the
Company's  Proxy  Statement for the                            2000 Annual Meeting of
Shareholders]
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.16)* | Form
of Non-Qualified Stock Option Agreement used in conjunction with the Gehl Company 2000
Equity Incentive Plan [Incorporated by reference to Exhibit 4.5 to the Companys
Registration Statement on Form S-8 (Registration No. 333-36102)]
|-------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.17)* | Form
of Stock Option Agreement for Non-Employee Directors used in conjunction with the Gehl
Company 2000 Equity Incentive Plan [Incorporated by reference to Exhibit 4.6 to the
Companys Registration Statement on Form S-8 (Registration No. 333-36102)]
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.18)* | Form
of Change in Control and Severance Agreement between Gehl Company and Messrs. Keyes,
Miller, Moore and Mulcahy [Incorporated by reference to Exhibit 10.8 of the Companys
Quarterly Report on Form 10-Q for the quarter ended July 1, 2000]
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.19)* | Forms
of Amendment to the Change in Control and Severance Agreement between Gehl Company and
Messrs. Keyes, Moore and Mulcahy dated as of June 13, 2001 [Incorporated by reference to
Exhibits 10.3 and 10.4 of the Companys Quarterly Report on Form 10-Q for the
quarter ended June 30, 2001]
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.20)* | Gehl
Company Deferred Compensation Plan effective August 1, 2000 [Incorporated by reference to
Exhibit 10.1 of the Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 2000]
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.21)* | Gehl
Company Incentive Compensation Plan [Incorporated by reference to Exhibit 10.1 of the
Companys Quarterly Report on Form 10-Q for the quarter ended March 27, 2004]
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.22)* | Gehl
Company 2004 Equity Incentive Plan [Incorporated by reference to Appendix B to the Companys
Proxy Statement for the 2004 Annual Meeting of Shareholders and by reference to Exhibit
10.1 of the Companys Quarterly Report on Form 10-Q for the quarter ended June 26,
2004]
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

61

---

|(10.23)* | Form
of Non-Qualified Stock Option Agreement used in conjunction with the Gehl Company 2004
Equity Incentive Plan [Incorporated by reference to Exhibit 10.2 of the Companys
Quarterly Report on Form 10-Q for the quarter ended June 26, 2004]
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.24)* | Form
of Stock Option Agreement for Non-Employee Directors used in conjunction with the Gehl
Company 2004 Equity Incentive Plan [Incorporated by reference to Exhibit 10.3 of the
Companys Quarterly Report on Form 10-Q for the quarter ended June 26, 2004]
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.25)* | Form
of Election Relating to Withholding Taxes In Connection With the Exercise of a
Non-Qualified Stock Option used in conjunction with the Gehl Company 2004 Equity
Incentive Plan [Incorporated by reference to Exhibit 10.4 of the Companys Quarterly
Report on Form 10-Q for the quarter ended June 26, 2004]
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.26)* | Form
of Change in Control and Severance Agreement between Gehl Company and Kenneth H. Feucht
dated as of May 1, 2004 [Incorporated by reference to Exhibit 10.8 of the Companys
Quarterly Report on Form 10-Q for the quarter ended July 1, 2000]
|-------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.27)* | Form
of Amendment to the Change in Control and Severance Agreement between Gehl Company and
Kenneth H. Feucht dated May 1, 2004 [Incorporated by reference to Exhibit 10.3 and 10.4
of the Companys Quarterly Report on Form 10-Q for the quarter ended June 30, 2001]
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.28) | Shareholder
Agreement, dated July 22, 2004 by and between Gehl Company and           Manitou BF S.A.
[Incorporated by reference to Exhibit 10.7 of the Companys           Quarterly
Report on Form 10-Q for the quarter ended June 26, 2004]
|------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.29)* | Change
in Control and Severance Agreement by and between Gehl Company and               Thomas
        M. Rettler dated as of August 23, 2004 [Incorporated by reference to Exhibit
              10.2 of the  Company's  Quarterly  Report on Form 10-Q for the quarter
ended                      September 25, 2004]
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.30)* | Supplemental
Retirement Benefit Agreement by and between Gehl Company and               Thomas
        M. Rettler dated as of August 23, 2004 [Incorporated by reference to Exhibit
              10.3 of the  Company's  Quarterly  Report on Form 10-Q for the quarter
ended                      September 25, 2004]
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.31)* | Form
of Restricted Stock Agreement used in conjunction with the Gehl Company 2004 Equity
Incentive Plan [Incorporated by reference to Exhibit 10.4 of the Companys Quarterly
Report on Form 10-Q for the quarter ended September 25, 2004]
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.32)* | Directors
Compensation schedule effective January 1, 2005 [Incorporated by reference to the Companys
Current Report on Form 8-K filed on March 2, 2005]
|-------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.33) | Purchase
and Sale Agreement, dated February 24, 2005, between Gehl Company and                Gehl
Receivables, LLC [Incorporated by reference to Exhibit 10.3 to the                Companys
Current Report on Form 8-K filed on March 2, 2005]
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.34) | Sale
and Servicing Agreement dated February 24, 2005, among Gehl Receivables
               LLC, Gehl Funding LLC, Gehl Company, JPMorgan Chase Bank, National
Association                and Systems and Services Technologies, Inc. [Incorporated by
reference to                Exhibit 10.4 to the Companys Current Report on Form 8-K
filed on March 2,                2005]
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.35) | Indenture,
dated February 24, 2005, among Gehl Funding LLC, UBS Real Estate
               Securities Inc. and JPMorgan Chase Bank, National Association
[Incorporated by                reference to Exhibit 10.5 to the Companys Current
Report on Form 8-K filed                on March 2, 2005]
|------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.36) | Note
Purchase Agreement, dated February 24, 2005, among Gehl Funding LLC, Gehl
               Company and UBS Real Estate Securities Inc. [Incorporated by reference to
               Exhibit 10.6 to the Companys Current Report on Form 8-K filed on
March 2,                2005]
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

62

---

|(10.37)* | Form
of Change in Control and Severance  Agreement  between Gehl Company and James J. Monnat
 executed as                            of July 22, 2005.
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------

|(10.38)* | Form
of Change in Control and  Severance  Agreement  between  Gehl Company and
                           Daniel L. Miller executed as of December 16, 2005.
|-------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

|(21) | Subsidiaries
of Gehl Company
|---- | ----------------------------

|(23) | Consent
of PricewaterhouseCoopers LLP
|---- | -------------------------------------

|(31.1) | Certification
of the Chief Executive Officer pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002
|------ | ---------------------------------------------------------------------------------------------------------------------

|(31.2) | Certification
of the Chief Financial Officer pursuant to Section 302 of the                Sarbanes
Oxley Act of 2002
|------ | ---------------------------------------------------------------------------------------------------------------------

|(32.1) | Certification
of Periodic Financial Report by the Chief Executive Officer and                Chief
Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
               2002
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(99) | Proxy
Statement for 2006 Annual Meeting of Shareholders (To be filed with the
               Securities and Exchange Commission under Regulation 14A; except to the
extent                incorporated by reference, the Proxy Statement for the 2006 Annual
Meeting of                Shareholders shall not be deemed to be filed with the
Securities and Exchange                Commission as part of this Annual Report on Form
10-K)
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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* A management contract or
compensatory plan or arrangement.

Except as otherwise noted, all
documents incorporated by reference are to Commission File No. 0-18110.

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