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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

[  X  ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED        August 2, 2003      

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 1-9299

JOY GLOBAL INC.
(Exact Name of Registrant as Specified in Its Charter)

Indicate by checkmark 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, and (2) has been subject to such filing requirements for the past 90 days.         Yes [ X ]          No [     ]

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS.

Indicate by checkmark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.         Yes [ X ]          No [     ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).           Yes [ X ]           No [     ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

JOY GLOBAL INC.

FORM 10-Q -- INDEX
August 2, 2003

PART I. - FINANCIAL INFORMATION

Item 1.   Financial Statements

JOY GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In thousands except per share amounts)

See accompanying notes to condensed consolidated financial statements

JOY GLOBAL INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands)

See accompanying notes to condensed consolidated financial statements

JOY GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(Unaudited)
(In thousands)

See accompanying notes to condensed consolidated financial statements

JOY GLOBAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 2, 2003
(Unaudited)

1. Description of Business

Joy Global Inc. (the “Company” or “we,” “us” and “our”) manufactures and markets products classified into two business segments: underground mining machinery (Joy Mining Machinery or “Joy”) and surface mining equipment (P&H Mining Equipment or “P&H”). Joy is a major manufacturer of underground mining equipment for the extraction of coal and other bedded minerals and offers comprehensive service locations near major mining regions worldwide. P&H is a major producer of surface mining equipment for the extraction of ores and minerals and provides extensive operational support for many types of equipment used in surface mining.

2. Basis of Presentation

The Condensed Consolidated Financial Statements presented in this quarterly report on Form 10-Q are unaudited and have been prepared by us in accordance with accounting principles generally accepted in the United States for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC").

In the opinion of management, all adjustments necessary for the fair presentation on a going concern basis of the results of operations, cash flows and financial position for all periods presented have been made. All adjustments made are of a normal recurring nature except for those relating to fresh start accounting which are more fully discussed in these notes.

These financial statements should be read in conjunction with the financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended November 2, 2002. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. Certain prior year amounts have been reclassified to conform to the current year presentation.

The preparation of the financial statements in conformity with generally accepted accounting principles for interim financial information requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual amounts could differ from the estimates.

We adopted the principles of fresh start accounting set forth in the American Institute of Certified Public Accountants Statement of Position No. 90-7, “Financial Reporting by Entities in Reorganization Under the Bankruptcy Code,” upon emergence from bankruptcy during fiscal 2001.

We adopted Statement of Financial Accounting Standards (“SFAS”) No. 145, “Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13 and Technical Corrections as of April 2002,” effective with the beginning of fiscal 2003. SFAS No. 145 requires that gains and losses from extinguishment of debt be classified as extraordinary items only if they meet the criteria in Accounting Principles Board (“APB”) Opinion No. 30. The provisions of APB Opinion No. 30 distinguish transactions that are part of recurring operations from those that are unusual and infrequent. In accordance with SFAS No. 145, we have reclassified previously reported extraordinary losses on early retirement of debt to a separate line item above the caption “Income (loss) before reorganization items” in our Condensed Consolidated Statement of Operations for the nine months ended August 3, 2002. The reclassification had no effect on the previously reported net loss and reduced previously reported income from continuing operations before extraordinary item by $4.9 million ($0.10 per share) for the nine months ended August 3, 2002.

3. Acquisitions

Effective November 4, 2002, we acquired the 25% interest in our Australian surface mining equipment subsidiary owned by Kobelco Construction Machinery Co. Limited. Payment of the purchase price of approximately $12.3 million, which included $11.2 million of minority interest and $1.1 million in intangible assets, was made on March 18, 2003. As a result, our ownership of the subsidiary increased to 100% and we removed minority interest from our Condensed Consolidated Financial Statements.

4. Borrowings and Credit Facilities

On June 25, 2002, we entered into an amended and restated Credit Agreement (“Credit Agreement”) which consists of a $250 million revolving loan maturing on October 31, 2005. Substantially all of our assets and our domestic subsidiaries’ assets are pledged as collateral under the Credit Agreement. Outstanding borrowings bear interest equal to either LIBOR plus the applicable margin (2.25% to 3.25%) or the Base Rate (defined as the higher of the Prime Rate or the Federal Funds Effective Rate plus 0.50%) plus the applicable margin (1.25% to 2.25%) at our option depending on certain of our financial ratios. We pay a commitment fee ranging from 0.50% to 0.75% on the unused portion of the revolving loan. The Credit Agreement was amended as of October 31, 2002, to, among other things, lower financial covenants for the quarter ended November 2, 2002 and for each quarter in fiscal 2003. At August 2, 2003, we were in compliance with these financial covenants. Earlier in 2002 we issued $200 million in 8.75% Senior Subordinated Notes due March 15, 2012.

Both the Senior Subordinated Note Indenture and Credit Agreement contain restrictions and financial covenants relating to, among other things, minimum financial performance and limitations on the incurrence of additional indebtedness and liens, asset sales, and capital expenditures. The covenants in the Senior Subordinated Note Indenture are less restrictive than the covenants in the Credit Agreement. Interest coverage, leverage and EBITDA covenants in the Credit Agreement generally become more restrictive over the term of the agreement.

During the 2003 Third Quarter, Joy retired $8.3 million and $4.3 million (gross principal amounts) of its 8.5% and 8.75%, respectively, industrial revenue bonds (“IRB’s”). Joy recorded a pre-tax charge of $0.26 million related to the redemption of these IRB’s, consisting of a bond redemption premium payment and a non-cash write-off of the associated debt issuance costs.

At August 2, 2003, there were no outstanding borrowings under the Credit Agreement. Outstanding letters of credit issued under the Credit Agreement, which count toward the $250 million credit limit, totaled approximately $58.3 million. The available balance is also limited by a borrowing base calculation. At August 2, 2003, there was approximately $92.7 million available for borrowings under the Credit Agreement.

5. Shareholders’ Equity

We have 150,000,000 shares of authorized common stock, par value $1.00 per share, 50,000,000 of which will ultimately be distributed in connection with our July 12, 2001 (“Effective Date”) emergence from bankruptcy and are deemed outstanding for accounting purposes at the Effective Date. Under our Plan of Reorganization (“POR”), the 50,000,000 shares are being distributed at approximately six month intervals to holders of allowed claims in the bankruptcy case, as the remaining open bankruptcy claims are resolved. On July 31, 2003, we released our fifth distribution under the POR amounting to 1,133,875 shares of common stock, bringing total distributions to date under the POR to 48,766,577 shares. The fifth distribution was based on approximately $1.24 billion of “current adjusted claims” and, when combined with the prior distributions, equated one share of Joy Global Inc. common stock for each $24.72 of allowed claim. As of August 2, 2003, 1,233,423 shares are designated for future distribution under the POR and held in a disputed claim equity reserve pending resolution of remaining open bankruptcy claims.

Our stock incentive plan authorizes the grant of up to 8,056,000 stock options, performance units and other stock-based awards to officers, employees and directors. As of August 2, 2003, stock option grants aggregating approximately 4.5 million shares had been made to approximately 250 individuals. Options to purchase 15,000 shares have also been granted to each of our six outside directors. On February 25, 2003, grants of 5,582 restricted stock units were made to each of our six outside directors. The restricted stock unit grants replace annual stock option grants made to outside directors in prior years. The restricted stock units vest one year after the grant date and provide that a number of shares of common stock equal to the number of vested units will be delivered one year after the director's service on the board terminates.

The 2001 and 2003 Performance Unit Award Programs under our Stock Incentive Plan provide long-term incentive compensation opportunities to certain senior executives. Up to approximately 742,000 shares of Common Stock may be earned by the senior executives under the 2001 and 2003 Performance Unit Award Programs if, at the end of a three and one quarter year award cycle, for the 2001 Performance Unit Awards, or at the end of a three year award cycle, for the 2003 Performance Unit Awards, cumulative net cash flow, as defined in the performance award agreements, exceeds certain threshold amounts. Each performance unit represents the right to earn one share of common stock. Awards can range from 0% to 150% of the target award opportunities. In the event of a change in control, the performance units are paid out in cash based on the greater of actual performance or target award. As of May 3, 2003, the compensation expense charge for these awards was $2.2 million, all of which was recognized in fiscal 2003..

As of August 2, 2003, awards under the stock incentive plan, our stock-based employee compensation plan, were accounted for under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. The following table illustrates the effect on net income and earnings (loss) per share if we had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation.

Separate Statements of Shareholders’ Equity are not required to be presented for interim periods. However, comprehensive income (loss) consisted of the following:

6. Basic and Diluted Net Income (Loss) Per Share

Basic net income (loss) per share is computed based on the weighted-average number of ordinary shares outstanding during each period. Diluted net income (loss) per share is computed based on the weighted average number of ordinary shares outstanding during each period, plus dilutive potential ordinary shares considered outstanding during the period, in accordance with SFAS No. 128, “Earnings per Share.” Under SFAS No. 128, additional shares associated with the performance units are not to be included in the diluted earnings per share denominator until the performance and vesting criteria have been met.

The following table sets forth the computation of basic and diluted earnings per share:

7. Contingent Liabilities:

The Company and certain of its present and former senior executives were named as defendants in a class action, captioned in re: Harnischfeger Industries, Inc. Securities Litigation, filed in the United States District Court for the Eastern District of Wisconsin on June 5, 1998. This action sought damages in an unspecified amount on behalf of a class of purchasers of our common stock, based principally on allegations that our disclosures with respect to certain contracts of Beloit Corporation, a former business unit, violated the federal securities laws. An order and final judgement approving the settlement of this matter was issued by the District Court on November 22, 2002. Our responsibility for the settlement was paid out of our available insurance.

The Official Committee of Unsecured Creditors of Beloit Corporation, purportedly suing in its own right and in the name and on behalf of Beloit Corporation, filed suit in the Milwaukee County Circuit Court on June 5, 2001 against certain present and former officers of the Company and Beloit Corporation seeking both money damages in excess of $300 million and declaratory relief. Among other things, the plaintiff alleges that the defendants should be held liable for “waste and mismanagement of Beloit’s assets.” Plaintiff also alleges that settlement agreements reached with certain former officers of the Company constituted fraudulent transfers and should be deemed null and void. Plaintiffs have agreed that any judgement will be limited to and satisfied out of our available insurance. Milwaukee County Court dismissed this matter on May 24, 2002. Plaintiff appealed this decision to the Wisconsin Court of Appeals. On July 1, 2003, the appeals court reversed the decision and remanded the case to the county court. The defendants then filed a petition for review with the Wisconsin Supreme Court.

The Beloit Liquidating Trust also filed a motion in the Bankruptcy Court for reallocation and reimbursement of professional fees and intercompany expenses. We filed an expert report with the Bankruptcy Court indicating that the Beloit Liquidating Trust owes us additional monies for professional fees. Discovery in this matter is continuing.

John G. Kling, purportedly on his own behalf and “in a representative capacity for the Harnischfeger Industries Employees’ Savings Plan,” filed suit in the United States District Court for the District of Massachusetts on November 9, 2001, against certain of the Company’s present and former employees, officers and directors. This action seeks damages in an unspecified amount based on, among other things, allegations that the members of the Company’s Pension Investment Committee, the Pension Committee of the Company’s Board of Directors and Fidelity Management Trust Company failed to properly discharge their fiduciary obligations under ERISA with respect to the “Harnischfeger Common Stock Fund” in the Harnischfeger Industries Employees’ Savings Plan. The individual defendants’ March 29, 2002 motion to dismiss this matter was not granted by the District Court. A motion to dismiss our former directors from this action is pending.

On February 27, 2003, Joy Mining Machinery Limited ("Joy MM"), a subsidiary of the Company located in the United Kingdom, commenced an arbitration in the International Centre for the Settlement of Investment Disputes against The General Organization for Industrial and Mining Projects ("IMC"), an agency of the government of Egypt, to resolve certain disputes arising under an agreement entered into in 1998 between Joy MM and IMC relating to underground mining equipment for the Abu Tartur project in Egypt. Legal proceedings commenced by IMC against Joy MM in Egypt in this matter in late 2002 are pending. IMC may seek wrongfully to draw on approximately $15 million in bank guarantees established for the benefit of IMC in connection with the agreement.

By notice dated May 16, 2003, Sokolovskaya Investment Company (“SIC”), a mining company in Russia, filed a request for arbitration with the ICC International Court of Arbitration against Joy MM to recover damages alleged to have arisen out of contracts entered into by Joy MM and SIC in 1995 and 1996 for the supply of underground mining equipment and related services. The request for arbitration seeks damages for loss of profit, delay, repairs, loss of use and other consequential damages of at least $67 million. The Company vigorously disputes the claim. The arbitration panel has been selected and proceedings before it are commencing.

The Company and its subsidiaries are party to other litigation matters and claims that are normal in the course of their operations. Also, as a normal part of their operations, the Company’s subsidiaries undertake contractual obligations, warranties and guarantees in connection with the sale of products or services. Although the outcome of these matters cannot be predicted with certainty and favorable or unfavorable resolutions may affect the results of operations on a quarter-to-quarter basis, we believe that the results of the above noted litigation and other pending litigation will not have a materially adverse effect on our consolidated financial position, results of operations or liquidity.

The Company and its subsidiaries are also involved in a number of proceedings and potential proceedings relating to environmental matters. Although it is difficult to estimate the potential exposure related to these environmental matters, we believe that the resolution of these matters will not have a materially adverse effect on our consolidated financial position, results of operations or liquidity.

8. Inventories

Consolidated inventories consisted of the following:

9. Warranties

We provide for the estimated costs that may be incurred under product warranties to remedy deficiencies of quality or performance of our products. These product warranties extend over either a specified period of time, units of production or machine hours depending upon the product subject to the warranty. We accrue a provision for estimated future warranty costs based upon the historical relationship of warranty costs to sales. Warranty reserve is included in other accrued liabilities in the Condensed Consolidated Balance Sheet. We periodically review the adequacy of the accrual for product warranties and adjust the warranty percentage and accrued warranty reserve for actual experience as necessary

The following table reconciles the changes in the Company's product warranty reserve as of and for the Three and Nine Months ended August 2, 2003:

10. Restructuring Charges

Costs associated with restructuring activities, other than those activities covered by SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” or that involve an entity newly acquired in a business combination, are accounted for in accordance with SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities”. Accordingly, costs associated with such activities are recorded as restructuring costs in the consolidated statements of operations when the liability is incurred. Below is a summary of the activity related to restructuring costs recorded pursuant to SFAS No. 146 for the three and nine Months ended August 2, 2003.

During the 2003 First Quarter, we began implementing a manufacturing capacity rationalization at our P&H Mining Equipment Milwaukee location. A reduction of factory space by 350,000 square feet will result in a facility that is more efficient yet still capable of producing the entire world’s expected needs for the P&H range of surface mining products. The rationalization will take most of fiscal 2003 to complete, and is expected to result in first year savings greater than the cash costs to implement. The expected costs are estimated at $2.1 million. In accordance with SFAS No. 144, approximately $1.2 million of restructuring charges were incurred for property, plant and equipment determined to be either held for sale or disposed of other than by sale in the 2003 First Quarter. In addition, approximately $0.2 million and $0.4 million were incurred for costs to close and consolidate the facility in accordance with SFAS No. 146 in the 2003 Third Quarter and 2003 Nine Months, respectively.

During the 2003 Second Quarter, Joy Mining Machinery began implementing a manufacturing capacity rationalization plan for North America. The expected costs for the Joy North American manufacturing capacity rationalization are estimated at $3.9 million. Included in this amount is $2.2 million for one-time termination benefits for an estimated 132 employees, including salaried and non-salaried employees, $0.6 million for abandoned assets, and $1.1 million for other associated costs. As of August 2, 2003, Joy had recorded charges of $0.4 million for termination benefits related to the involuntary termination of 23 employees, charges of $0.6 million for the abandonment of excess warehousing equipment at its Franklin, Pennsylvania facility, and $0.7 million for equipment relocation costs.

11. Reorganization Items

Reorganization items include income, expense and loss that were realized or incurred as a result of our reorganization under Chapter 11 of the Bankruptcy Code. For the nine months ended August 2, 2003, approximately $0.5 million was recorded for professional fees relating to the bankruptcy. The $5.8 million reorganization item at August 3, 2002, represented the collection of a fully reserved note from Beloit Corporation and professional fee settlements offset by legal fees, a loss on the sale of a building related to pre-emergence activities, and a write-down of a note receivable related to a discontinued operation.

12. Recent Accounting Pronouncements

In May 2003, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity.” SFAS No. 150 establishes standards for classifying and measuring certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 is effective for financial instruments entered into or modified after August 21, 2003 and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. SFAS No. 150 will be implemented by reporting the cumulative effect of a change in accounting principle for financial instruments created before the issuance date of the statement and still existing at the beginning of the period of adoption. Although we are still in the process of reviewing the new statement, we do not expect the adoption of this statement to have a material impact on our financial statements.

13. Segment Information

At August 2, 2003, we had two reportable segments: Underground Mining Machinery and Surface Mining Equipment. Operating income (loss) of the segments does not include interest income or expense and provision (benefit) for income taxes. There are no significant intersegment sales. Total assets are those used in our operations in each segment. Corporate assets consist primarily of deferred financing costs, cash and cash equivalents and deferred income taxes.

(1) - Includes fresh start accounting charges of $3.0 million, $9.0 million, $4.7 million and $46.8 million for Underground Mining Machinery and $2.3 million, $7.9 million, $2.3 million and $28.8 million for Surface Mining Equipment for the 2003 Third Quarter, 2003 Nine Months, 2002 Third Quarter and 2002 Nine Months, respectively.

14. Subsidiary Guarantors

The following tables present condensed consolidated financial information for the 2003 Third Quarter, 2002 Third Quarter, 2003 Nine Months and 2002 Nine Months for: (a) the Company; (b) on a combined basis, the guarantors of the Credit Agreement and Senior Subordinated Notes, which include substantially all the domestic subsidiaries of the Company (“Subsidiary Guarantors”); and (c) on a combined basis, the non-guarantors, which include all of the foreign subsidiaries of the Company (“Non-Guarantor Subsidiaries”). Separate financial statements of the Subsidiary Guarantors are not presented because the guarantors are unconditionally, jointly, and severally liable under the guarantees, and we believe such separate statements or disclosures would not be useful to investors.

Condensed Consolidated
Statement of Operations
(Unaudited)
(In thousands)

Condensed Consolidated
Statement of Operations
(Unaudited)
(In thousands)

Condensed Consolidated
Balance Sheet
August 2, 2003
(Unaudited)
(In thousands)

Condensed Consolidated
Balance Sheet
November 2, 2002
(In thousands)

Condensed Consolidated
Statement of Cash Flow
(Unaudited)
(In thousands)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. Forward-looking statements are subject to certain risks, uncertainties and assumptions which could cause actual results to differ materially from those projected, including those risks, uncertainties and assumptions described in Item 5 - Other Information - Forward-Looking Statements and Cautionary Factors in Part II of this report. References to the “Company,” “we,” “us,” and “our” refer to Joy Global Inc.

The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes to the Condensed Consolidated Financial Statements.

2003 Third Quarter as compared to 2002 Third Quarter

Net Sales

The following table sets forth the combined net sales included in our Condensed Consolidated Statement of Operations:

Total net sales for the 2003 Third Quarter were relatively equal to total net sales in the 2002 Third Quarter.

Net sales for underground mining machinery for the 2003 Third Quarter were $27.2 million lower than net sales in the 2002 Third Quarter. Sales of new machines decreased while sales of aftermarket products and services increased. The decrease in new machine sales was due to lower sales of roof supports in the United States and the markets served out of the United Kingdom and lower shipments of haulage equipment in the United States. Aftermarket product and service sales in the United States increased compared to a year ago as parts and components sales recovered from the depressed markets of the prior four quarters. In addition, aftermarket products and service sales in South Africa and Australia were higher than a year ago, principally as a result of an increase in complete machine rebuilds in South Africa and Australia and a favorable currency translation of the South African Rand.

Net sales for surface mining equipment in the 2003 Third Quarter were $25.0 million higher than net sales in the 2002 Third Quarter. The increase was due to higher aftermarket product and service sales in Australia, North America and South America. New machine sales were comparable to those of the 2003 Third Quarter.

Operating Income

The following table sets forth the operating income (loss) included in our Condensed Consolidated Statement of Operations, adjustments due to fresh start accounting and restructuring charges, and the resulting adjusted operating income. We believe that this presentation of adjusted operating income provides more comparability between years, especially in regards to the fresh start accounting items:

The 2003 Third Quarter fresh start accounting items consist of $3.3 million of additional depreciation expense associated with revalued property, plant and equipment and $2.0 million of amortization expense related to the valuation of certain identifiable finite-lived intangible assets. In addition, restructuring charges of $1.0 million were incurred for the manufacturing capacity rationalization at our Joy and P&H locations. The 2002 Third Quarter fresh start accounting items consisted of adjustments to operating income of $2.0 million for the increase to fair value of inventory that was charged to cost of sales, $3.3 million of additional depreciation expense associated with revalued property, plant and equipment, and $1.7 million of amortization expense related to the valuation of certain identifiable finite-lived intangible assets.

Operating income for the 2003 Third Quarter increased by $10.3 million compared to operating income for the 2002 Third Quarter while adjusted operating income for the 2003 Third Quarter increased by $9.7 million compared to adjusted operating income for the 2002 Third Quarter.

Operating income for underground mining machinery for the 2003 Third Quarter was $12.2 million compared to $7.5 million for the 2002 Third Quarter. Despite a decrease in sales volumes, operating income increased primarily due to a favorable sales mix to include a larger percentage of aftermarket products and services, a decrease in fresh start accounting items and an adverse manufacturing variance included in the 2002 Third Quarter. These were partially offset by increases in insurance and pension expense and a provision for the annual performance bonus.

Operating income for surface mining equipment for the 2003 Third Quarter was $9.0 million compared to $2.9 million for the 2002 Third Quarter. The improvement in operating income was due to an increase in sales volume, a favorable sales mix to include a larger percentage of aftermarket parts and services, and an increase in manufacturing absorption, partially offset by increases in insurance and pension expense and a provision for the annual performance bonus.

Product Development, Selling and Administrative Expense

Product development, selling and administrative expense increased to $59.8 million in the 2003 Third Quarter compared to $52.4 million in the 2002 Third Quarter. This increase was due primarily to an increase in our general insurance and pension expenses, provision for the annual performance bonus, and the compensation expense for performance units. In addition, the weakening of the dollar caused an unfavorable impact in the translation of non-U.S. denominated expenses into U.S. dollars. Product development, selling and administrative expense as a percentage of net sales for the 2003 Third Quarter was 19.9% compared to 17.3% for the 2002 Third Quarter.

Interest Expense

Net interest expense for the 2003 Third Quarter decreased to $5.4 million, which included $1.3 million of interest income and $6.7 million of interest expense, as compared to $6.8 million in the 2002 Third Quarter, which included $0.8 million of interest income and $7.6 million of interest expense. The decrease in interest expense was principally due to a 2% interest rate reduction from the redemption of the 10.75% Senior Notes and the subsequent issuance of the 8.75% Senior Subordinated Notes. The increase in interest income was primarily due to higher interest rates on cash balances in South Africa. No borrowings were made under the Credit Facility during the 2003 Third Quarter.

Provision for Income Taxes

Income tax expense for the 2003 Third Quarter increased to $3.2 million as compared to a $0.4 million income tax benefit in the 2002 Third Quarter. On a consolidated basis, the Company’s effective income tax rates for the 2003 and the 2002 Third Quarters were 33.0% and 31.0%, respectively.

2003 Nine Months as compared to 2002 Nine Months

Net Sales

The following table sets forth the combined net sales included in our Condensed Consolidated Statement of Operations:

Total net sales for the 2003 Nine Months were 4.5% less than total net sales in the 2002 Nine Months.

Net sales for underground mining machinery for the 2003 Nine Months were $101.7 million lower than net sales in the 2002 Nine Months. The decrease resulted from decreases in new machine sales. Sales of aftermarket products and services for the 2003 Nine Months were comparable to such sales for the 2002 Nine Months. The decline in new machine sales this year as compared to last year was primarily due to lower sales of continuous miners and roof supports in the United States and the markets served out of the United Kingdom partially offset by an increase in sales of continuous miners in Australia. Aftermarket product and service sales were higher than a year ago, principally as a result of an increase in complete machine rebuilds in South Africa and a favorable currency translation of the South African Rand denominated sales.

Net sales for surface mining equipment in the 2003 Nine Months were $62.0 million higher than net sales in the 2002 Nine Months. The increase was due to both higher new machine sales and an increase in aftermarket product and service sales. The increase in new machine sales this year as compared to last year was due to a higher demand for electric shovels in Canada and the continued construction of a walking dragline in Australia. The increase in aftermarket product and service sales was due to higher parts sales in North America and South America and increased service sales in the United States, Chile and Australia.

Operating Income

The following table sets forth the operating income (loss) included in our Condensed Consolidated Statements of Operations, adjustments due to fresh start accounting and restructuring charges, and the resulting adjusted operating income. We believe that this presentation of adjusted operating income provides more comparability between years, especially in regards to the fresh start accounting items:

The 2003 Nine Months fresh start accounting items consist of $9.9 million of additional depreciation expense associated with revalued property, plant and equipment and $6.1 million of amortization expense related to the valuation of certain identifiable finite-lived intangible assets. In addition, restructuring charges of $3.2 million were incurred for manufacturing capacity rationalizations at our Joy and P&H locations. The 2002 Nine Months fresh start accounting items consisted of adjustments to operating income of $53.3 million for the increase to fair value of inventory that was charged to cost of sales, $10.0 million of additional depreciation expense associated with revalued property, plant and equipment, and $12.3 million of amortization expense related to the valuation of certain identifiable finite-lived intangible assets.

Operating income for the 2003 Nine Months increased by $52.3 million compared to operating income for the 2002 Nine Months while adjusted operating income for the 2003 Nine Months decreased by $4.0 million compared to adjusted operating income for the 2002 Nine Months.

Operating income from underground mining machinery for the 2003 Nine Months was $23.8 million compared to $3.5 million for the 2002 Nine Months. The increase in operating income was due to the fresh start accounting items. Adjusted operating income for the 2003 Nine Months was $34.5 million compared to $50.3 million for the 2002 Nine Months. The decrease in adjusted operating income was due to the decrease in sales volumes, unfavorable manufacturing absorption and additional pension and insurance expense, partially offset by a reduction in spending and the elimination of unfavorable manufacturing variances in the United Kingdom associated with roof support production and benefits from our strategic sourcing initiative.

Operating income for surface mining equipment for the 2003 Nine Months was $15.3 million compared to a $(18.8) million operating loss for the 2002 Nine Months. The improvement in operating income was due to the fresh start accounting items, higher sales volume, increased manufacturing absorption, continued cost controls and benefits from our strategic sourcing initiative, partially offset by increases in pension and insurance expense and the provision for the annual performance bonus.

Product Development, Selling and Administrative Expense

Product development, selling and administrative expense increased to $175.5 million in the 2003 Nine Months compared to $162.3 million in the 2002 Nine Months. This increase was due primarily to an increase in our general insurance and pension expenses, provision for the annual performance bonus and the compensation expense for performance units. Product development, selling and administrative expense as a percentage of net sales for the 2003 Nine Months was 20.9% compared to 18.5% for the 2002 Nine Months.

Interest Expense

Net interest expense for the 2003 Nine Months decreased to $16.9 million, which included $3.8 million of interest income and $20.7 million of interest expense as compared to $22.1 million in the 2002 Nine Months, which included $2.1 million of interest income and $24.2 million of interest expense. The decrease in interest expense was principally due to a 2% interest rate reduction from the redemption of the 10.75% Senior Notes and the subsequent issuance of the 8.75% Senior Subordinated Notes. The increase in interest income was primarily due to higher interest rates on cash balances in South Africa.

Provision for Income Taxes

Income tax provision for the 2003 Nine Months was $2.5 million as compared to a $20.6 million income tax benefit in the 2002 Nine Months. The change in tax provision was driven primarily by the global mix of earnings and the recognition of approximately $60.0 million less of fresh start accounting adjustments over the prior year. On a consolidated basis, the Company’s effective income tax rates for the 2003 Nine Months and the 2002 Nine Months were 42.5% and 38.7%, respectively.

Liquidity and Capital Resources

At August 2, 2003, the Company had $90.4 million in cash and cash equivalents and working capital of $380.2 million, as compared to $70.9 million in cash, cash equivalents and short-term investments and working capital of $382.7 million at November 2, 2002.

Operating Activities

During the 2003 Nine Months cash provided by operations was $48.6 million compared to $67.1 million in the 2002 Nine Months. The decrease in operating cash flow was primarily a result of a $36.5 million pension contribution in addition to the minimum funding requirement partially offset by improvements in operating performance and working capital. A $6.5 million increase in cash flow from working capital, before giving effect to currency translation adjustments, in the 2003 Nine Months primarily reflects decreases in accounts receivable, inventories and other current assets and increases in trade accounts payable and advance payments and progress billings offset by a decrease in other accrued liabilities.

Investing Activities

Our 2003 Nine Months capital expenditures of $17.4 million were higher than the $12.6 million reported in the 2002 Nine Months. We expect to fund our capital expenditures in 2003 with operating cash flows and available cash. During the 2003 Nine Months, we collected $3.5 million on a note receivable and paid $12.3 million for the remaining equity interest in our Australian subsidiary.

Financing Activities

During the 2003 Nine Months, we paid approximately $13.0 million for the redemption of two industrial revenue bonds (“IRB’s”) and our short-term notes increased by approximately $1.2 million.

Based upon the current level of operations, we believe that cash flow from operations, together with available borrowings under the Credit Agreement, will be adequate to meet our anticipated future cash requirements.

Credit Facility

On June 25, 2002, we entered into an amended and restated Credit Agreement (“Credit Agreement”) which consists of a $250 million revolving loan maturing on October 31, 2005. Substantially all of our assets and our subsidiaries’ assets are pledged as collateral under the Credit Agreement. Outstanding borrowings bear interest equal to either LIBOR plus the applicable margin (2.25% to 3.25%) or the Base Rate (defined as the higher of the Prime Rate or the Federal Funds Effective Rate plus 0.50%) plus the applicable margin (1.25% to 2.25%) at our option depending on certain of our financial ratios. We pay a commitment fee ranging from 0.50% to 0.75% on the unused portion of the revolving loan. The Credit Agreement was amended as of October 31, 2002, to, among other things, lower financial covenants for the quarter ended November 2, 2002 and for each quarter in fiscal 2003. At August 2, 2003, we were in compliance with these financial covenants.

Both the Senior Subordinated Note Indenture and Credit Agreement contain restrictions and financial covenants relating to, among other things, minimum financial performance and limitations on the incurrence of additional indebtedness and liens, asset sales, and capital expenditures. The covenants in the Senior Subordinated Note Indenture are less restrictive than the covenants in the Credit Agreement. Interest coverage, leverage and EBITDA covenants in the Credit Agreement generally become more restrictive over the term of the agreement.

During the 2003 Third Quarter, Joy retired $8.3 million and $4.3 million (gross principal amounts) of its 8.5% and 8.75%, respectively, IRB’s. Joy recorded a pre-tax charge of $0.26 million related to the redemption of these IRB’s, consisting of a bond redemption premium payment and a non-cash write-off of the associated debt issuance costs.

At August 2, 2003, there were no outstanding borrowings under the Credit Agreement. Outstanding letters of credit issued under the Credit Agreement, which count toward the $250 million credit limit, totaled approximately $58.3 million. The available balance is also limited by a borrowing base calculation. At August 2, 2003, there was approximately $92.7 million available for borrowings under the Credit Agreement.

Off-Balance Sheet Arrangements

We lease various assets under operating leases. The aggregate payments under operating leases as of August 2, 2003 are disclosed below in the table of Disclosures about Contractual Obligations and Commercial Commitments. No significant changes to lease commitments have occurred since August 2, 2003. We have no other off-balance sheet arrangements.

Disclosures about Contractual Obligations and Commercial Commitments

The following table sets forth our contractual obligations and commercial commitments as of August 2, 2003:

Bookings and Backlog

New order bookings for the 2003 Nine Months totaled $861.1 million, a decrease of $59.1 million from the 2002 Nine Months. Decreased bookings for the 2003 Nine Months resulted from lower bookings for original equipment for both underground mining machinery and surface mining equipment partially offset by higher bookings for aftermarket parts and service for surface mining equipment.

Our backlog as of August 2, 2003 was $279.9 million compared to $256.9 million at the beginning of the fiscal year. This backlog included $166.3 million related to underground mining machinery as compared to $126.2 million at the end of fiscal 2002, and $113.6 million related to surface mining equipment as of August 2, 2003 as compared to $130.7 million at the end of fiscal 2002. This increase in backlog was the result of aftermarket parts orders exceeding their shipments for surface mining equipment and orders for original equipment exceeding their shipments for underground mining machinery. These backlog amounts exclude customer arrangements under long-term equipment life cycle management contracts that extend for up to thirteen years.

Critical Accounting Policies

Our discussion and analysis of financial condition and results of operations is based upon our Condensed Consolidated Financial Statements which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these Condensed Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates and judgments on an ongoing basis, including those related to bad debts, excess inventory, warranty, intangible assets, income taxes and contingencies. We base our estimates on historical experience and assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

We believe the accounting policies described below are the ones that most frequently require us to make estimates and judgments, and therefore are critical to the understanding of our results of operations:

Revenue Recognition

We generally recognize revenue at the time of shipment and passage of title for sales of products and at the time of performance for sales of repairs and services. We recognize revenue on long-term contracts, such as the manufacture of mining shovels, drills, draglines and roof support systems, using the percentage-of-completion method. Sales and gross profit are recognized as work is performed based on the relationship between actual costs incurred and total estimated costs at completion. Sales and gross profit are adjusted prospectively for revisions in estimated total contract costs and contract values. Estimated losses are recognized in full when identified.

We have life cycle management contracts with customers to supply parts and service over 1 to 13 year terms. These contracts are based on the projected costs and revenues of servicing the respective machines over the specified contract terms. Customers are billed monthly and the respective deferred revenues recorded based on payments received. Revenue is recognized in the period in which parts are supplied or services provided.

Inventories

Inventories are carried at the lower of cost or market using the first-in, first-out method of accounting. We evaluate all inventory, including raw material, work-in-process, finished goods and spare parts, for realizable value on a regular basis. Inherent in our estimates of net realizable value are our estimates related to our future manufacturing schedules, customer demand, possible alternative uses, and ultimate realizable value of potentially excess inventory.

Intangible Assets

Intangible assets include software, drawings, patents, trademarks, unpatented technology and other specifically identifiable intangible assets. We review the carrying value of our intangible assets on an annual basis or more frequently as circumstances warrant. Intangible assets with indefinite-lives are reviewed in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” and valued on a relief from royalty basis using future revenues discounted over the time frame of economic benefit. Intangible assets with finite-lives are reviewed in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” and valued using undiscounted cash flows. While we believe that our estimates of future revenues and cash flows are reasonable, different assumptions regarding revenues and cash flows could materially affect our evaluations.

Accrued Warranties

We record accruals for potential warranty claims based on prior warranty cost experience. Warranty costs are accrued at the time revenue is recognized. These warranty costs are based upon management’s assessment of past costs and current experience. However, actual costs could be higher or lower than amounts estimated, as the amount and value of warranty costs are subject to variation as a result of many factors that cannot be predicted with certainty.

Pension and Postretirement Benefits and Costs

Pension benefits and expenses are developed from actuarial valuations. These valuations are based on assumptions including, among other things, interest rate fluctuations, discount rates, expected returns on plan assets, retirement ages, and years of service. Future changes affecting the assumptions will change the related pension benefit or expense.

Income Taxes

We recognize deferred income taxes by applying enacted statutory rates to tax loss carryforwards and temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. We provide valuation allowances for deferred tax assets where it is considered more likely than not that we will not realize the benefit of such assets.

Other Significant Items

Acquisitions

Effective November 4, 2002, we acquired the 25% interest in our Australian surface mining equipment subsidiary owned by Kobelco Construction Machinery Co. Limited. Payment of the purchase price of approximately $12.3 million, which included $11.2 million of minority interest and $1.1 million in intangible assets, was made on March 18, 2003. As a result, our ownership of the subsidiary increased to 100% and we removed minority interest from our Condensed Consolidated Financial Statements.

Restructuring Charges

During the 2003 First Quarter, we began implementing a manufacturing capacity rationalization at our P&H Mining Equipment Milwaukee location. A reduction of factory space by 350,000 square feet will result in a facility that is more efficient yet still capable of producing the entire world’s expected needs for the P&H range of surface mining products. The rationalization will take most of fiscal 2003 to complete, and is expected to result in first year savings greater than the cash costs to implement. The expected costs are estimated at $2.1 million. In accordance with SFAS No. 144, approximately $1.2 million of restructuring charges were incurred for property, plant and equipment determined to be either held for sale or disposed of other than by sale in the 2003 First Quarter. In addition, approximately $0.2 million and $0.4 million were incurred for costs to close and consolidate the facility in accordance with SFAS No. 146 in the 2003 Third Quarter and 2003 Nine Months, respectively.

During the 2003 Second Quarter, Joy Mining Machinery began implementing a manufacturing capacity rationalization plan for North America. The expected costs for the Joy North American manufacturing capacity rationalization are estimated at $3.9 million. Included in this amount is $2.2 million for one-time termination benefits for an estimated 132 employees, including salaried and non-salaried employees, $0.6 million for abandoned assets, and $1.1 million for other associated costs. As of August 2, 2003, Joy has recorded charges of $0.4 million for termination benefits related to the involuntary termination of 23 employees, charges of $0.6 million for the abandonment of excess warehousing equipment at its Franklin, Pennsylvania facility, and $0.7 million for equipment relocation costs.

Contingent Liabilities:

On February 27, 2003, Joy Mining Machinery Limited ("Joy MM"), a subsidiary of the Company located in the United Kingdom, commenced an arbitration in the International Centre for the Settlement of Investment Disputes against The General Organization for Industrial and Mining Projects ("IMC"), an agency of the government of Egypt, to resolve certain disputes arising under an agreement entered into in 1998 between Joy MM and IMC relating to underground mining equipment for the Abu Tartur project in Egypt. Legal proceedings commenced by IMC against Joy MM in Egypt in this matter in late 2002 are pending. IMC may seek wrongfully to draw on approximately $15 million in bank guarantees established for the benefit of IMC in connection with the agreement.

By notice dated May 16, 2003, Sokolovskaya Investment Company (“SIC”), a mining company in Russia, filed a request for arbitration with the International Court of Arbitration against Joy MM, an indirect subsidiary of the Company in the United Kingdom, to recover damages alleged to have arisen out of contracts entered into by Joy MM and SIC in 1995 and 1996 for the supply of underground mining equipment and related services. The request for arbitration seeks damages for loss of profit, delay, repairs, loss of use and other consequential damages of at least $67 million. The Company vigorously disputes the claim.

Recent Accounting Pronouncements

In May 2003, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity.” SFAS No. 150 establishes standards for classifying and measuring certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 is effective for financial instruments entered into or modified after August 21, 2003 and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003. SFAS No. 150 will be implemented by reporting the cumulative effect of a change in accounting principle for financial instruments created before the issuance date of the statement and still existing at the beginning of the period of adoption. Although we are still in the process of reviewing the new statement, we do not expect the adoption of this statement to have a material impact on our financial statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As more fully described in our Annual Report on Form 10-K for the year ended November 2, 2002, we are exposed to various types of market risks, primarily currency risks. We monitor our risks in this area on a continuous basis and generally enter into forward foreign currency contracts to minimize these exposures for periods of less than one year. We do not engage in speculation in our derivative strategies. Gains and losses from foreign currency contract activities are offset by changes in the underlying costs of the transactions being hedged.

Item 4. Controls and Procedures

We have established disclosure controls and procedures to ensure that material information relating to us, including our consolidated subsidiaries, is made known to the officers who certify our financial reports and to other members of senior management and the Board of Directors.

Based on their evaluation as of a date within 90 days of the filing date of this Quarterly Report on Form 10-Q, the principal executive officer and principal financial officer of Joy Global Inc. have concluded that our disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934) are effective to ensure that the information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

There were no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of their most recent evaluation.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company and certain of its present and former senior executives were named as defendants in a class action, captioned in re: Harnischfeger Industries, Inc. Securities Litigation, filed in the United States District Court for the Eastern District of Wisconsin on June 5, 1998. This action sought damages in an unspecified amount on behalf of a class of purchasers of our common stock, based principally on allegations that our disclosures with respect to certain contracts of Beloit Corporation, a former business unit, violated the federal securities laws. An order and final judgement approving the settlement of this matter was issued by the District Court on November 22, 2002. Our responsibility for the settlement was paid out of our available insurance.

The Official Committee of Unsecured Creditors of Beloit Corporation, purportedly suing in its own right and in the name and on behalf of Beloit Corporation, filed suit in the Milwaukee County Circuit Court on June 5, 2001 against certain present and former officers of the Company and Beloit Corporation seeking both money damages in excess of $300 million and declaratory relief. Among other things, the plaintiff alleges that the defendants should be held liable for “waste and mismanagement of Beloit’s assets.” Plaintiff also alleges that settlement agreements reached with certain former officers of the Company constituted fraudulent transfers and should be deemed null and void. Plaintiffs have agreed that any judgement will be limited to and satisfied out of our available insurance. Milwaukee County Court dismissed this matter on May 24, 2002. Plaintiff appealed this decision to the Wisconsin Court of Appeals. On July 1, 2003, the appeals court reversed the decision and remanded the case to the county court. The defendants then filed a petition for review with the Wisconsin Supreme Court.

The Beloit Liquidating Trust also filed a motion in the Bankruptcy Court for reallocation and reimbursement of professional fees and intercompany expenses. We filed an expert report with the Bankruptcy Court indicating that the Beloit Liquidating Trust owes us additional monies for professional fees. Discovery in this matter is continuing.

John G. Kling, purportedly on his own behalf and “in a representative capacity for the Harnischfeger Industries Employees’ Savings Plan,” filed suit in the United States District Court for the District of Massachusetts on November 9, 2001, against certain of the Company’s present and former employees, officers and directors. This action seeks damages in an unspecified amount based on, among other things, allegations that the members of the Company’s Pension Investment Committee, the Pension Committee of the Company’s Board of Directors and Fidelity Management Trust Company failed to properly discharge their fiduciary obligations under ERISA with respect to the “Harnischfeger Common Stock Fund” in the Harnischfeger Industries Employees’ Savings Plan. The individual defendants’ March 29, 2002 motion to dismiss this matter was not granted by the District Court. A motion to dismiss our former directors from this action is pending.

On February 27, 2003, Joy Mining Machinery Limited ("Joy MM"), a subsidiary of the Company located in the United Kingdom, commenced an arbitration in the International Centre for the Settlement of Investment Disputes against The General Organization for Industrial and Mining Projects ("IMC"), an agency of the government of Egypt, to resolve certain disputes arising under an agreement entered into in 1998 between Joy MM and IMC relating to underground mining equipment for the Abu Tartur project in Egypt. Legal proceedings commenced by IMC against Joy MM in Egypt in this matter in late 2002 are pending. IMC may seek wrongfully to draw on approximately $15 million in bank guarantees established for the benefit of IMC in connection with the agreement.

By notice dated May 16, 2003, Sokolovskaya Investment Company (“SIC”), a mining company in Russia, filed a request for arbitration with the ICC International Court of Arbitration against Joy MM to recover damages alleged to have arisen out of contracts entered into by Joy MM and SIC in 1995 and 1996 for the supply of underground mining equipment and related services. The request for arbitration seeks damages for loss of profit, delay, repairs, loss of use and other consequential damages of at least $67 million. The Company vigorously disputes the claim. The arbitration panel has been selected and proceedings before it are commencing.

The Company and its subsidiaries are party to other litigation matters and claims that are normal in the course of their operations. Also, as a normal part of their operations, the Company’s subsidiaries undertake contractual obligations, warranties and guarantees in connection with the sale of products or services. Although the outcome of these matters cannot be predicted with certainty and favorable or unfavorable resolutions may affect the results of operations on a quarter-to-quarter basis, we believe that the results of the above noted litigation and other pending litigation will not have a materially adverse effect on our consolidated financial position, results of operations or liquidity.

The Company and its subsidiaries are also involved in a number of proceedings and potential proceedings relating to environmental matters. Although it is difficult to estimate the potential exposure related to these environmental matters, we believe that the resolution of these matters will not have a materially adverse effect on our consolidated financial position, results of operations or liquidity.

Item 2. Changes in Securities and Use of Proceeds

Not applicable.

Item 3. Defaults upon Senior Securities

Not applicable.

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

No matters were submitted to a vote of security holders during the 2003 Third Quarter

Item 5. Other Information – Forward-Looking Statements and Cautionary Factors

This report and other documents or oral statements we make or made on our behalf contain both historical and forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended. Forward-looking statements are predictions and generally can be identified by use of statements that include phrases such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “foresee”, or other words or phrases of similar import. Forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from the predictions. In addition to any factors that may accompany forward-looking statements, factors that could materially affect actual results include the following.

Our principal businesses involve designing, manufacturing, marketing and servicing large, complex machines. Significant periods of time are necessary to design and build these machines. Large amounts of capital must be devoted by our customers to purchase these machines and to finance the mines that use them. Our success in obtaining and managing a relatively small number of sales opportunities, including our success in securing payment for such sales and meeting the requirements of warranties and guarantees associated with such sales, can affect our financial performance. In addition, many mines are located in undeveloped or developing economies where business conditions are less predictable. In recent years, up to 47% of our total sales occurred outside the United States.

Additional factors that could cause actual results to differ materially from those contemplated include:

• Factors affecting customers’ purchases of new equipment, rebuilds, parts and services such as: prices for coal, copper and other commodities mined by our customers, production capacity, stockpiles, and production and consumption rates of coal, copper, iron, gold, oil and other ores and minerals; the cash flows of customers; the cost and availability of financing to customers and the ability of customers to obtain regulatory approval for investments in mining projects; consolidations among customers; work stoppages at customers or providers of transportation; and the timing, severity and duration of customer buying cycles.
  
  
• Factors affecting our ability to capture available sales opportunities, including: customers’ perceptions of the quality and value of our products and services as compared to competitors’ products and services; customers’ perceptions of our financial health and stability as compared to our competitors; and the availability of manufacturing capacity at our factories.
  
  
• Factors affecting our ability to successfully manage the sales we obtain, such as: the accuracy of our cost and time estimates; the adequacy of our cost and control systems; our success in delivering products and completing service projects on time and within budget; our success in recruiting and retaining managers and key employees; wage stability and cooperative labor relations; plant capacity and utilization; and whether acquisitions are assimilated and divestitures completed without unexpected difficulties.
  
  
• Factors affecting general business levels, such as: political and economic turmoil in major markets such as the United States, Canada, Europe, Asia and the Pacific Rim, South Africa, Australia and Chile; environmental and trade regulations; and the stability and ease of exchange of currencies.
  
  
• Factors affecting our general business, such as: unforeseen patent, tax, product, environmental, toxic tort, employee health and benefit, or contractual liabilities; nonrecurring restructuring and other special charges; changes in environmental, safety, accounting or tax rules or regulations; reassessments of asset valuations for such assets as receivables, inventories, fixed assets and intangible assets; and leverage and debt service.
  
  
• Various other factors beyond our control.
  
  

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

     31(a) Chief Executive Officer Rule 13a-14(a)/15d-14(a) Certifications

     31(b) Chief Financial Officer Rule 13a-14(a)/15d-14(a) Certifications

     32 Section 1350 Certifications

(b) Reports on Form 8-K

           Form 8-K/A Amendment Number One and Restatement of: Form 8-K Report dated as of
           August 28, 2003 Item 12 – “Results of Operations and Financial Conditions”.

           Form 8-K Report dated as of August 28, 2003 Item 12 – “Results of Operations and Financial Conditions”.

SIGNATURES

Pursuant to the requirements 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.