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 July 27, 2012

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 001-09299

JOY GLOBAL INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	39-1566457
(State of Incorporation)	(I.R.S. Employer Identification No.)

100 East Wisconsin Ave, Suite 2780

Milwaukee, Wisconsin 53202

(Address of principal executive offices)

(Zip Code)

(414) 319-8500

(Registrant’s Telephone Number, Including Area Code)

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, and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files.)    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non- accelerated filer or a smaller reporting company. See definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

LARGE ACCELERATED FILER	x	ACCELERATED FILER	¨
NON-ACCELERATED FILER	¨	SMALLER REPORTING COMPANY	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

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

Class	Outstanding at August 24, 2012
Common Stock, $1 par value	105,878,314

JOY GLOBAL INC.

FORM 10-Q INDEX

July 27, 2012

	PAGE NO.
PART I. – FINANCIAL INFORMATION
Item 1 – Financial Statements:
Condensed Consolidated Statement of Income – Quarter and Nine Months Ended July 27, 2012 and July 29, 2011		4
Condensed Consolidated Balance Sheet – July 27, 2012 and October 28, 2011		5
Condensed Consolidated Statement of Cash Flows – Nine Months Ended July 27, 2012 and July 29, 2011		6
Notes to Condensed Consolidated Financial Statements		7 – 30
Item  2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations		31 – 40
Item 3 – Quantitative and Qualitative Disclosures About Market Risk		40
Item 4 – Controls and Procedures		40
PART II. – OTHER INFORMATION
Item 1 – Legal Proceedings		41
Item 1A – Risk Factors		41
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		41
Item 3 – Defaults Upon Senior Securities		41
Item 4 – Mine Safety Disclosures		41
Item 5 – Other Information		41
Item 6 – Exhibits		42
Signature		43

Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are identified by forward-looking terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “indicate,” “intend,” “may be,” “objective,” “plan,” “potential,” “predict,” “should,” “will be,” and similar expressions. Forward-looking statements are based on our expectations and assumptions at the time they are made and are subject to risks and uncertainties, that may cause actual results to differ materially from the forward-looking statements. In addition, certain market outlook information is based on third party sources that we cannot independently verify, but that we believe to be reliable. Important factors that could cause our actual results to differ materially from the results anticipated by the forward-looking statements include general economic and industry conditions in the markets in which we operate, risks associated with conducting business in foreign countries, risks associated with acquisitions, and the risks discussed in Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for our fiscal year ended October 28, 2011, and in other filings that we make with the U. S. Securities and Exchange Commission. Any or all of these factors could cause our actual results and financial or legal status for future periods to differ materially from those expressed or referred to in any forward-looking statement. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

JOY GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

(In thousands, except per share amounts)

	Quarter Ended						Nine Months Ended
	July 27,			July 29,			July 27,			July 29,
	2012			2011			2012			2011
Net sales	$	1,388,723		$	1,136,352		$	4,065,984		$	3,068,613
Costs and expenses:
Cost of sales		912,939			739,626			2,716,404			2,013,615
Product development, selling and administrative expenses		179,436			165,325			532,825			438,985
Other income		(3,127	)		(4,591	)		(29,903	)		(7,839	)
Operating income		299,475			235,992			846,658			623,852
Interest income		1,533			3,438			4,062			11,595
Interest expense		(18,335	)		(9,470	)		(54,061	)		(25,195	)
Reorganization items		—			—			—			(35	)
Income from continuing operations before income taxes		282,673			229,960			796,659			610,217
Provision for income taxes		88,291			58,155			241,806			174,208
Income from continuing operations		194,382			171,805			554,853			436,009
Income from continuing operations attributable to non-controlling interest		(38	)		—			(180	)		—
Income from continuing operations attributable to Joy Global Inc.		194,344			171,805			554,673			436,009
Income (loss) from discontinued operations, net of income taxes		(826	)		1,300			(5,215	)		1,300
Income (loss) from discontinued operations, net of income taxes attributable to non-controlling interest		—			—			—			—
Income (loss) from discontinued operations, net of income taxes attributable to Joy Global Inc.		(826	)		1,300			(5,215	)		1,300
Net income		193,556			173,105			549,638			437,309
Net income attributable to non-controlling interest		(38	)		—			(180	)		—
Net income attributable to Joy Global Inc.	$	193,518		$	173,105		$	549,458		$	437,309
Basic earnings (loss) per share:
Continuing operations	$	1.83		$	1.63		$	5.24		$	4.16
Discontinued operation		(0.01	)		0.01			(0.05	)		0.01
Net income	$	1.82		$	1.64		$	5.19		$	4.17
Diluted earnings (loss) per share:
Continuing operations	$	1.82		$	1.61		$	5.19		$	4.09
Discontinued operation		(0.01	)		0.01			(0.05	)		0.01
Net income	$	1.81		$	1.62		$	5.14		$	4.10
Dividends per share	$	0.175		$	0.175		$	0.525		$	0.525
Weighted average shares outstanding:
Basic		106,025			105,204			105,794			104,803
Diluted		106,866			106,735			106,867			106,475

See Notes to Condensed Consolidated Financial Statements.

4

JOY GLOBAL INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

(In thousands)

	July 27,		October 28,
	2012		2011
ASSETS
Current assets:
Cash and cash equivalents	$	454,237	$	288,321
Cash held in escrow		—		866,000
Accounts receivable, net		1,148,639		884,696
Inventories		1,544,062		1,334,134
Other current assets		189,902		190,568
Current assets of discontinued operations		—		288
Total current assets		3,336,840		3,564,007
Property, plant and equipment, net		779,235		539,571
Investment in unconsolidated affiliate		—		380,114
Other intangible assets, net		599,126		385,441
Goodwill		1,383,654		428,478
Deferred income taxes		62,143		73,123
Other non-current assets		146,379		55,448
Non-current assets of discontinued operations		—		172
Total assets	$	6,307,377	$	5,426,354
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term notes payable, including current portion of long-term obligations	$	82,400	$	35,895
Trade accounts payable		487,811		452,519
Employee compensation and benefits		129,234		147,664
Advance payments and progress billings		823,231		771,841
Accrued warranties		104,208		82,737
Other accrued liabilities		303,301		206,588
Current liabilities of discontinued operations		18,609		27,327
Total current liabilities		1,948,794		1,724,571
Long-term obligations		1,538,460		1,356,412
Accrued pension costs		204,811		332,452
Other liabilities		116,117		61,124
Total liabilities		3,808,182		3,474,559
Shareholders’ equity		2,499,195		1,951,795
Total liabilities and shareholders’ equity	$	6,307,377	$	5,426,354

See Notes to Condensed Consolidated Financial Statements.

5

JOY GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(In thousands)

	Nine Months Ended
	July 27,			July 29,
	2012			2011
Operating Activities:
Net Income	$	549,638		$	437,309
(Income) loss from discontinued operations		5,215			(1,300	)
Adjustments to continuing operations:
Depreciation and amortization		119,826			50,669
Deferred income taxes		26,612			(11,883	)
Excess income tax benefit from share-based payment awards		(20,826	)		(17,837	)
Contributions to retiree benefit plans		(138,055	)		(134,352	)
Retiree benefit plan expense		29,258			38,429
Other, net		(29,363	)		18,369
Changes in Working Capital Items Attributed to Continuing Operations, net of acquisition:
Accounts receivable, net		(97,330	)		(64,902	)
Inventories, net		(199,470	)		(259,180	)
Other current assets		(29,577	)		(41,574	)
Trade accounts payable		(44,807	)		18,894
Employee compensation and benefits		(22,463	)		(12,169	)
Advance payments and progress billings		54,040			303,475
Other accrued liabilities		50,323			22,186
Net cash provided by operating activities – continuing operations		253,021			346,134
Net cash used by operating activities – discontinued operations		(15,747	)		(2,444	)
Net cash provided by operating activities		237,274			343,690
Investing Activities:
Property, plant and equipment acquired		(169,290	)		(75,189	)
Acquisition of International Mining Machinery, net of cash acquired		(955,917	)		(140,613	)
Acquisition of LeTourneau, net of cash acquired		—			(1,041,161	)
Withdrawal of cash held in escrow		866,000			—
Other, net		7,119			2,514
Net cash used by investing activities – continuing operations		(252,088	)		(1,254,449	)
Net cash used by investing activities – discontinued operations		—			(361	)
Net cash used by investing activities		(252,088	)		(1,254,810	)
Financing Activities:
Share-based payment awards		30,589			70,426
Dividends paid		(55,431	)		(54,870	)
Proceeds from Further Term Loan		250,000			—
Change in short and long-term obligations, net		(36,641	)		508,861
Financing fees		(1,620	)		(9,435	)
Net cash provided by financing activities – continuing operations		186,897			514,982
Net cash provided by financing activities – discontinued operations		—			—
Net cash provided by financing activities		186,897			514,982
Effect of Exchange Rate Changes on Cash and Cash Equivalents		(6,167	)		23,649
Increase (Decrease) in Cash and Cash Equivalents		165,916			(372,489	)
Cash and Cash Equivalents at Beginning of Period		288,321			815,581
Cash and Cash Equivalents at End of Period	$	454,237		$	443,092

See Notes to Condensed Consolidated Financial Statements.

6

1. Description of Business

Joy Global Inc. (the “Company”) is a worldwide leader in high productivity mining solutions, and we manufacture and market original equipment and aftermarket parts and services for both underground and surface mining and certain industrial applications. Our equipment is used in major mining regions throughout the world to mine coal, copper, iron ore, oil sands and other minerals. We operate in two business segments: Underground Mining Machinery and Surface Mining Equipment. We are a major manufacturer of underground mining equipment for the extraction of coal and other bedded minerals and offer comprehensive service locations near major mining regions worldwide. We are also a major producer of surface mining equipment for the extraction of ores and minerals and we provide 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 of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. In our opinion, 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 such adjustments made are of a normal recurring nature. The preparation of the financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual amounts could differ from the estimates.

These financial statements should be read in conjunction with the financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended October 28, 2011. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

3. Acquisitions

Acquisition of International Mining Machinery Holdings Limited

On December 29, 2011, we completed the purchase of 534.8 million shares of International Mining Machinery Holdings Limited (“IMM”). The shares, which represented approximately 41.1% of IMM’s outstanding common stock, were purchased pursuant to a stock purchase agreement, dated July 11, 2011, as amended and restated on July 14, 2011. The shares were purchased for HKD8.50 per share, or approximately $584.6 million. As a result of this and prior open market purchases, we acquired a controlling interest on such date of approximately 69.2% of IMM’s outstanding common stock and were required by Rule 26.1 of the Hong Kong Takeovers Code to commence a tender offer to purchase all of the outstanding shares of IMM common stock and options to purchase IMM common stock that we did not already own. The tender offer commenced on January 6, 2012 and we completed the tender offer on February 10, 2012. As a result of the tender offer, we beneficially owned approximately 98.9% of IMM’s outstanding common stock. On July 25, 2012, we effected the compulsory acquisition of the remaining shares under applicable provisions of the Cayman Island Companies Law, under which IMM is incorporated. We paid consideration of approximately $16.2 million to complete the compulsory acquisition. The combined effect of these transactions resulted in our beneficial ownership of 100% of the common stock of IMM.

Prior to obtaining control on December 29, 2011, our investment in IMM had been accounted for under the equity method. Upon obtaining control, we applied the acquisition method of accounting, re-measured the preexisting interest at fair value and recorded a gain of $19.4 million. The gain is reported in the Condensed Consolidated Statement of Income under “other income” for the nine month period ended July 27, 2012. The results of operations for IMM have been included in the accompanying Condensed Consolidated Financial Statements from December 29, 2011 forward as part of the Underground Mining Machinery segment. Prior to obtaining control, our share of income from IMM was reported in the Condensed Consolidated Statement of Income under “other income” and included in Corporate.

7

The preliminary allocation of the purchase price to the assets acquired and liabilities assumed is based upon the estimated fair values at the date of acquisition. The fair values of the assets and liabilities included in the table below are preliminary and subject to change as we are currently in the process of obtaining third-party valuations of assets acquired and liabilities assumed and assessing certain reserves and contingent liabilities. Adjustments have been made in the current quarter to reflect updated fair value estimates for inventory and intangible assets and to adjust for other liabilities. The excess of the purchase price over the net tangible and identifiable intangible assets is reflected as goodwill. The following table summarizes the preliminary estimates of fair value of the assets acquired and the liabilities assumed as of the acquisition date:

(in thousands)
Assets Acquired:
Cash and cash equivalents	$	72,912
Accounts receivable		202,825
Inventories		91,176
Other current assets		15,622
Property, plant and equipment		123,600
Other intangible assets and goodwill		1,138,894
Other non-current assets		13,041
Total assets acquired		1,658,070
Liabilities Assumed:
Short-term notes payable		(14,666	)
Accounts payable		(87,305	)
Employee compensation and benefits		(6,458	)
Advance payments and progress billings		(6,122	)
Other accrued liabilities		(61,123	)
Other non-current liabilities		(58,958	)
Total liabilities assumed		(234,632	)
	$	1,423,438

The fair value for identified intangible assets was primarily determined based upon discounted expected cash flows. Of the $1.1 billion of intangible assets and goodwill, $165.0 million has been preliminarily assigned to intangible assets which are being amortized over a weighted average life of 13.5 years. The determination of the useful life was based upon historical experience, economic factors, and future cash flows of the assets acquired.

The results of IMM have been included in the condensed consolidated financial statements since the date of acquisition. We have incurred acquisition costs of $24.3 million related to IMM, of which $8.6 million was recognized in the prior fiscal year.

The following unaudited pro forma financial information for the nine months ended July 27, 2012 and three and nine months ended July 29, 2011 reflect the results of continuing operations of the Company as if the acquisition of IMM had been completed on October 28, 2011 and October 30, 2010, respectively. Pro forma adjustments have been made for changes in depreciation and amortization expenses related to the valuation of the acquired tangible and intangible assets at fair value, the elimination of non-recurring items and the addition of incremental costs related to debt used to finance the acquisition.

8

	Nine Months Ended				Quarter Ended
	July 27,		July 29,		July 29,
	2012		2011		2011
Net sales	$	4,135,147	$	3,320,159	$	1,232,051
Income from continuing operations	$	562,128	$	438,259	$	172,153
Basic earnings per share from continuing operations	$	5.31	$	4.18	$	1.64
Diluted earnings per share from continuing operations	$	5.26	$	4.12	$	1.61

The unaudited pro forma financial information is presented for information purposes only. It is not necessarily indicative of what our financial position or results of operations actually would have been had we completed the acquisition at the dates indicated, nor does it purport to project the future financial position or operating results of the combined company.

Acquisition of LeTourneau Technologies, Inc.

We completed the acquisition of LeTourneau Technologies, Inc. (“LeTourneau”) on June 22, 2011. LeTourneau historically operated in three businesses, mining equipment, steel products and drilling products. Subsequent to the acquisition, we entered into a definitive agreement to sell the drilling products business of LeTourneau and that transaction closed on October 24, 2011. The results of operations for LeTourneau have been included in the accompanying Condensed Consolidated Financial Statements from the acquisition date forward, with results of the drilling products business being included as results of discontinued operations. Results for the mining equipment and steel products business are included in continuing operations as part of the Surface Mining Equipment segment.

We purchased all of the outstanding shares of LeTourneau. The purchase price for the acquisition was as follows:

(in thousands)
Cash consideration	$	1,100,000
Working capital purchase price adjustments		(46,323	)
	$	1,053,677

The allocation of the purchase price was finalized in the third quarter of fiscal 2012. Adjustments have been made in the current quarter to reflect warranty reserves and the agreement of the disposition of certain assets and liabilities related to the drilling products business.

4. Inventories

Consolidated inventories consisted of the following:

	July 27,		October 28,
(in thousands)	2012		2011
Finished goods	$	890,978	$	832,730
Work in process and purchased parts		416,728		269,798
Raw materials		236,356		231,606
	$	1,544,062	$	1,334,134

July 27, 2012 inventories include $80.2 million attributable to the IMM acquisition.

9

5. Warranties

The following table reconciles the changes in the product warranty reserve.

	Quarter Ended						Nine Months Ended
	July 27,			July 29,			July 27,			July 29,
(in thousands)	2012			2011			2012			2011
Balance, beginning of period	$	102,429		$	66,776		$	82,737		$	62,351
Accrual for warranty expensed during the period		8,413			9,780			34,314			27,376
Settlements made during the period		(13,117	)		(9,408	)		(36,668	)		(25,076	)
Change in liability for pre-existing warranties during the period, including expirations		7,498			928			19,016			1,170
Effect of foreign currency translation		(1,015	)		(398	)		(988	)		1,857
Acquired warranty accrual		—			11,545			5,797			11,545
Balance, end of period	$	104,208		$	79,223		$	104,208		$	79,223

Adjustments were made in the first and third quarters of fiscal 2012 to reflect changes in the liability of $10.0 million and $6.1 million, respectively, for pre-existing warranties related to the mining equipment business of LeTourneau.

6. Borrowings and Credit Facilities

Direct borrowings and capital lease obligations consisted of the following:

	July 27,			October 28,
(in thousands)	2012			2011
Term Loan due 2016	$	475,000		$	493,750
Further Term Loan due 2016		244,375			—
6.0% Senior Notes due 2016		248,270			248,008
6.625% Senior Notes due 2036		148,460			148,441
5.125% Senior Notes due 2021		496,003			495,755
Short-term notes payable and bank overdrafts		6,977			4,140
Capital leases and other		1,775			2,213
		1,620,860			1,392,307
Less: Amounts due within one year		(82,400	)		(35,895	)
Long-term obligations	$	1,538,460		$	1,356,412

We have a $700.0 million unsecured revolving credit facility (the “Credit Agreement”) that expires on November 3, 2014. The Credit Agreement requires the maintenance of certain financial covenants including leverage and interest coverage ratios. The Credit Agreement also restricts payment of dividends or other return of capital when the consolidated leverage ratio exceeds a stated level amount. At July 27, 2012, we were in compliance with all financial covenants of the Credit Agreement and had no restrictions on the payment of dividends or return of capital.

At July 27, 2012, there were no direct borrowings under the Credit Agreement. Outstanding letters of credit issued under the Credit Agreement, which reduce availability under the $700.0 million credit limit, totaled $280.1 million. At July 27, 2012, there was $419.9 million available for borrowings under the Credit Agreement.

10

In November 2006, we issued $250.0 million aggregate principal amount of 6.0% Senior Notes due 2016 and $150.0 million aggregate principal amount of 6.625% Senior Notes due 2036 (the “2016 Notes” and “2036 Notes,” respectively, and collectively, the “Notes”) with interest on the Notes being paid semi-annually in arrears on May 15 and November 15 of each year, starting May 15, 2007. The Notes are guaranteed by each of our current and future material domestic subsidiaries. The Notes were issued in a private placement under an exemption from registration provided by the Securities Act, as amended. In the second quarter of fiscal 2007, the Notes were exchanged for substantially identical notes that are registered under the Securities Act. At our option, we may redeem some or all of the Notes at a redemption price of the greater of 100% of the principal amount of the Notes to be redeemed or the sum of the present values of the principal amounts and the remaining scheduled interest payments using a discount rate equal to the sum of a Treasury rate of a comparable Treasury issue plus 0.3% for the 2016 Notes and 0.375% for the 2036 Notes.

On June 16, 2011, we entered into a credit agreement, which matures June 16, 2016, and provided for a $500.0 million term loan commitment (the “Term Loan”), which was drawn in full to partially finance the acquisition of LeTourneau. The Term Loan requires quarterly principal payments that began in the fourth quarter of fiscal year 2011. The Term Loan contains terms and conditions that are substantially similar to the terms and conditions of the Credit Agreement. The Term Loan is guaranteed by each of our current and future material domestic subsidiaries and requires the maintenance of certain financial covenants, including leverage and interest coverage ratios. At July 27, 2012, we were in compliance with all financial covenants of the Term Loan.

On October 12, 2011, we issued $500.0 million aggregate principal amount of the 5.125% Senior Notes due in 2021 (the “2021 Notes”) at a discount of $4.2 million in an offering that was registered under the Securities Act. Interest on the 2021 Notes is paid semi-annually in arrears on October 15 and April 15 of each year, starting April 15, 2012, and the 2021 Notes are guaranteed by each of our current and future material domestic subsidiaries. At our option, we may redeem some or all of the 2021 Notes at a redemption price of the greater of 100% of the principal amount of the 2021 Notes to be redeemed or the sum of the present values of the principal amounts and the remaining scheduled interest payments using a discount rate equal to the sum of a Treasury rate of a comparable Treasury issue plus 0.5%.

On October 31, 2011, we entered into a credit agreement that provides for a further $250.0 million term loan commitment (the “Further Term Loan”). The Further Term Loan requires quarterly principal payments that began in the third quarter of fiscal year 2012 and matures June 16, 2016. The Further Term Loan contains terms and conditions that are substantially similar to the terms and conditions of the Credit Agreement and the Term Loan. The Further Term Loan is guaranteed by each of our current and future material domestic subsidiaries and requires the maintenance of certain financial covenants, including leverage and interest coverage ratios. The Further Term Loan was drawn in full on February 10, 2012, in conjunction with the settlement of the IMM tender offer. At July 27, 2012, we were in compliance with all financial covenants of the Further Term Loan.

7. Share-Based Compensation

We recognized total share-based compensation expense for the quarter ended July 27, 2012 and July 29, 2011 of approximately $5.5 million and $6.7 million, respectively. We recognized total share-based compensation expense for the nine months ended July 27, 2012 and July 29, 2011 of approximately $20.0 million and $18.9 million, respectively.

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8. Retiree Benefits

The components of the net periodic pension and other post-retirement benefits expense recognized are as follows:

	Pension Benefits						Postretirement Benefits
	Quarter Ended						Quarter Ended
	July 27,			July 29,			July 27,			July 29,
(in thousands)	2012			2011			2012			2011
Service cost	$	2,748		$	5,223		$	220		$	166
Interest cost		20,620			21,800			302			343
Expected return on assets		(24,612	)		(23,833	)		(57	)		(71	)
Amortization of:
Prior service cost		327			343			13			12
Actuarial loss (gain)		8,415			8,999			(272	)		(214	)
Net periodic benefit cost	$	7,498		$	12,532		$	206		$	236

	Pension Benefits						Postretirement Benefits
	Nine Months Ended						Nine Months Ended
	July 27,			July 29,			July 27,			July 29,
(in thousands)	2012			2011			2012			2011
Service cost	$	13,223		$	15,493		$	720		$	736
Interest cost		61,863			64,182			1,028			1,155
Expected return on assets		(73,812	)		(69,540	)		(237	)		(255	)
Amortization of:
Prior service cost		980			1,031			39			36
Actuarial loss (gain)		25,247			26,573			(870	)		(982	)
Curtailment loss		1,077			—			—			—
Net periodic benefit cost	$	28,578		$	37,739		$	680		$	690

The actuarial loss (gain) arises from differences in estimates and actual experiences for certain assumptions including changes in discount rate and expected return on assets. During fiscal 2012 we expect to contribute approximately $180.0 million to $190.0 million to our defined benefit employee pension plans.

On February 28, 2012 a modification was made to the Joy Global Pension Plan freezing benefits for all salaried and non-bargained hourly participants effective May 1, 2012. We recorded a $1.1 million curtailment charge in the second quarter of fiscal 2012 in conjunction with the freeze.

9. Derivatives

We enter into derivative contracts, primarily foreign currency forward contracts, to hedge the risks of certain identified and anticipated transactions in currencies other than the functional currency of the respective operating unit. The types of risks hedged are those arising from the variability of future earnings and cash flows caused by fluctuations in foreign currency exchange rates. We have designated substantially all of these contracts as either cash flow or fair value hedges. These contracts are for forecasted transactions and committed receivables and payables denominated in foreign currencies and are not entered into for speculative purposes.

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We are exposed to certain foreign currency risks in the normal course of our global business operations. For derivative contracts that are designated and qualify for a cash flow hedge, the effective portion of the gain or loss of the derivative contract is recorded as a component of other comprehensive income, net of tax. This amount is reclassified into the income statement on the line associated with the underlying transaction for the period(s) in which the hedged transaction affects earnings. The amounts recorded in accumulated other comprehensive income for existing cash flow hedges are generally expected to be reclassified into earnings within one year and all of the existing hedges will be reclassified into earnings by December 2013. Ineffectiveness related to these derivative contracts was recorded in the Condensed Consolidated Statement of Income as a gain of $0.4 million and $0.3 million for the quarters ended July 27, 2012 and July 29, 2011, respectively. Ineffectiveness related to these derivative contracts was recorded in the Condensed Consolidated Statement of Income as a gain of $2.0 million and $0.6 million for the nine months ended July 27, 2012 and July 29, 2011, respectively.

For derivative contracts that are designated and qualify as a fair value hedge, gain or loss is recorded in the Condensed Consolidated Statement of Income under the heading Cost of Sales. For the quarters ended July 27, 2012 and July 29, 2011, we recorded a $0.3 million gain and a $2.3 million loss, respectively, in the Condensed Consolidated Statement of Income related to fair value hedges which was offset by foreign exchange fluctuations of the underlying receivables. For the nine months ended July 27, 2012 and July 29, 2011, we recorded a $2.9 million loss and a $0.7 million loss, respectively, in the Condensed Consolidated Statement of Income related to fair value hedges which was offset by foreign exchange fluctuations of the underlying receivables.

For derivative contracts that are not designated as a fair value hedge or a cash flow hedge the gain or loss is recorded in the Condensed Consolidated Statement of Income under the heading Cost of Sales. For the quarter and nine months ended July 27, 2012 we recorded a $0.8 million gain and a $2.0 million gain, respectively, in the Condensed Consolidated Statement of Income related to undesignated hedges which was offset by foreign exchange fluctuations.

The following table summarizes the effect of cash flow hedges on the Consolidated Financial Statements:

(in thousands)	Effective Portion
	Amount of Gain/(Loss)			Gain/(Loss) Reclassified from AOCI into Earnings
Derivative Hedging Relationship	Recognized in OCI			Location	Amount
Foreign currency forward contracts
Quarter ended July 27, 2012	$	(1,769	)	Cost of sales	$	(2,450	)
				Sales		456
Nine months ended July 27, 2012	$	(1,112	)	Cost of sales	$	(343	)
				Sales		414
Quarter ended July 29, 2011	$	2,945		Cost of sales	$	413
				Sales		456
Nine months ended July 29, 2011	$	9,392		Cost of sales	$	3,357
				Sales		4,039

We are exposed to credit risk in the event of nonperformance by counterparties to the forward contracts. The contract amount, along with other terms of the forward, determines the amount and timing of amounts to be exchanged and the contract is generally subject to credit risk only when the contract has a positive fair value.

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Forward exchange contracts are entered into to protect the value of forecasted transactions and committed future foreign currency receipts and disbursements and consequently any market-related loss on the forward contract would be offset by changes in the value of the hedged item. As a result, we are generally not exposed to net market risk associated with these instruments.

10. Equity and Noncontrolling Interest

Changes in consolidated equity attributable to the Company and noncontrolling interest consisted of the following, net of taxes where applicable:

	Quarter Ended July 27, 2012									Quarter Ended July 29, 2011
	Equity			Equity						Equity			Equity
	Attributable			Attributable to						Attributable			Attributable to
	to Joy			Noncontrolling			Total			to Joy			Noncontrolling		Total
	Global Inc.			Interests			Equity			Global Inc.			Interests		Equity
Beginning balance	$	2,328,149		$	16,387		$	2,344,536		$	1,709,091		$	—	$	1,709,091
Comprehensive income (loss):
Net income		193,518			38			193,556			173,105			—		173,105
Change in pension liability, net of taxes		5,734			—			5,734			11,438			—		11,438
Derivative instrument fair market value adjustment, net of taxes		146			—			146			1,360			—		1,360
Currency translation adjustment		(20,843	)		—			(20,843	)		(1,777	)		—		(1,777	)
Total comprehensive income:		178,555			38			178,593			184,126			—		184,126
Other changes in equity:
Dividends		(18,522	)		—			(18,522	)		(18,382	)		—		(18,382	)
Purchase of IMM shares from noncontrolling interest		—			(16,425	)		(16,425	)		—			—		—
Other, including share based payment awards and options exercised		11,013			—			11,013			3,536			—		3,536
Ending balance	$	2,499,195		$	—		$	2,499,195		$	1,878,371		$	—	$	1,878,371

	Nine Months Ended July 27, 2012									Nine Months Ended July 29, 2011
	Equity			Equity						Equity			Equity
	Attributable			Attributable to						Attributable			Attributable to
	to Joy			Noncontrolling			Total			to Joy			Noncontrolling		Total
	Global Inc.			Interests			Equity			Global Inc.			Interests		Equity
Beginning balance	$	1,951,795		$	—		$	1,951,795		$	1,342,366		$	—	$	1,342,366
Acquisition of controlling interest in IMM		—			437,654			437,654			—			—		—
Comprehensive income (loss):
Net income		549,458			180			549,638			437,309			—		437,309
Change in pension liability, net of taxes		27,045			—			27,045			23,210			—		23,210
Derivative instrument fair market value adjustment, net of taxes		(771	)		—			(771	)		1,309			—		1,309
Currency translation adjustment		(12,591	)		—			(12,591	)		50,055			—		50,055
Total comprehensive income:		563,141			180			563,321			511,883			—		511,883
Other changes in equity:
Dividends		(55,431	)		—			(55,431	)		(54,870	)		—		(54,870	)
Purchase of IMM shares from noncontrolling interest		—			(437,834	)		(437,834	)		—			—		—
Other, including share based payment awards and options exercised		39,690			—			39,690			78,992			—		78,992
Ending balance	$	2,499,195		$	—		$	2,499,195		$	1,878,371		$	—	$	1,878,371

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11. Basic and Diluted Net Income Per Share

Basic net income per share is computed by dividing net income attributable to the Company by the weighted-average number of shares outstanding during each period. Diluted net income per share is computed by dividing net income attributable to the Company by the weighted-average number of shares outstanding during each period, plus dilutive potential shares considered outstanding during the period.

The following table sets forth the computation of basic and diluted net income per share.

	Quarter Ended					Nine Months Ended
	July 27,			July 29,		July 27,			July 29,
(in thousands except per share data)	2012			2011		2012			2011
Numerator:
Income from continuing operations available to common shareholders	$	194,344		$	171,805	$	554,673		$	436,009
Income (loss) from discontinued operations available to common shareholders		(826	)		1,300		(5,215	)		1,300
Net income available to common shareholders	$	193,518		$	173,105	$	549,458		$	437,309
Denominator:
Denominator for basic net income per share -
Weighted average shares		106,025			105,204		105,794			104,803
Effect of dilutive securities:
Stock options, restricted stock units and performance shares		841			1,531		1,073			1,672
Denominator for diluted net income per share -
Adjusted weighted average shares and assumed conversions		106,866			106,735		106,867			106,475
Basic earnings (loss) per share:
Continuing operations	$	1.83		$	1.63	$	5.24		$	4.16
Discontinued operations		(0.01	)		0.01		(0.05	)		0.01
Net income	$	1.82		$	1.64	$	5.19		$	4.17
Diluted earnings (loss) per share:
Continuing operations	$	1.82		$	1.61	$	5.19		$	4.09
Discontinued operations		(0.01	)		0.01		(0.05	)		0.01
Net income	$	1.81		$	1.62	$	5.14		$	4.10

Options to purchase approximately 1.3 million shares were outstanding at July 27, 2012 but were excluded from the calculation of diluted earnings per share as the effect would have been antidilutive.

12. Fair Value Measurements

GAAP establishes a three-level fair value hierarchy that prioritizes information used in developing assumptions when pricing an asset or liability as follows:

Level 1: Quoted prices in active markets for identical instruments

Level 2: Inputs, other than quoted prices in active markets that are observable for the instrument either directly or indirectly or quoted prices for similar instruments in active markets

Level 3: Unobservable inputs for the instrument where there is little or no market data, which requires the reporting entity to develop its own assumptions

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GAAP requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

The following tables present the fair value hierarchy for those assets and liabilities measured at fair value and disclose the fair value of long-term obligations recorded at cost as of July 27, 2012 and October 28, 2011. As of July 27, 2012 and October 28, 2011, we did not have any Level 3 assets or liabilities.

Fair Value Measurements

at July 27, 2012

(in thousands)	Carrying Value		Total Fair Value		Level 1		Level 2
Current Assets
Cash and cash equivalents	$	454,237	$	454,237	$	454,237	$	—
Other Current Assets
Derivatives	$	11,740	$	11,740	$	—	$	11,740
Other Accrued Liabilities
Derivatives	$	15,063	$	15,063	$	—	$	15,063
Long-term Obligations Including
Amounts due within One Year
Term Loan due 2016	$	475,000	$	527,415	$	—	$	527,415
Further Term Loan due 2016	$	244,375	$	280,842	$	—	$	280,842
6.0% Senior Notes due 2016	$	248,270	$	287,100	$	287,100	$	—
6.625% Senior Notes due 2036	$	148,460	$	177,465	$	177,465	$	—
5.125% Senior Notes due 2021	$	496,003	$	553,300	$	553,300	$	—

Fair Value Measurements

at October 28, 2011

(in thousands)	Carrying Value		Total Fair Value		Level 1		Level 2
Current Assets
Cash and cash equivalents	$	288,321	$	288,321	$	288,321	$	—
Cash held in escrow	$	866,000	$	866,000	$	866,000	$	—
Other Current Assets
Derivatives	$	8,904	$	8,904	$	—	$	8,904
Other Long-term Assets
Investment in unconsolidated affiliate	$	380,114	$	371,802	$	371,802	$	—
Other Accrued Liabilities
Derivatives	$	4,004	$	4,004	$	—	$	4,004
Long-term Obligations Including
Amounts due within One Year
6.0% Senior Notes due 2016	$	248,008	$	281,878	$	281,878	$	—
6.625% Senior Notes due 2036	$	148,441	$	164,504	$	164,504	$	—
Term Loan due 2016	$	493,750	$	486,949	$	—	$	486,949
5.125% Senior Notes due 2021	$	495,755	$	536,350	$	536,350	$	—

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The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value.

Cash and cash equivalents: The carrying value approximates fair value based on the short-term nature of these instruments.

Cash held in escrow: The carrying value approximates fair value.

Derivatives: The fair value of forward foreign exchange contracts is based on a valuation model that discounts cash flows resulting from the differential between the contract price and the market-based forward rate.

Senior Notes: The fair market value of the Senior Notes is estimated based on market quotations at the respective period end.

Term Loan: The fair value of our Term Loan is estimated using discounted cash flows and market conditions.

Further Term Loan: The fair value of our Further Term Loan is estimated using discounted cash flows and market conditions.

Investment in Unconsolidated Affiliate: The fair value of the investment in IMM at October 28, 2011 was estimated based on an active quoted market price. We obtained control of IMM on December 29, 2011, and the results of operations of IMM have been included with our Underground Mining Machinery segment from the acquisition date forward. See Note 3 for further information.

13. Contingent Liabilities

We and our subsidiaries are involved in various unresolved legal matters that arise in the normal course of operations, the most prevalent of which relate to product liability (including over 1,000 asbestos and silica-related cases), employment, and commercial matters. Also, as a normal part of operations, our 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 outcome of such legal and other matters will not have a materially adverse effect on our consolidated financial position, results of operations, or liquidity.

During the reorganization of our predecessor Harnischfeger Industries, Inc. in 1999 under Chapter 11 of the United States Bankruptcy Code, the Wisconsin Department of Workforce Development (“DWD”) filed claims against Beloit Corporation (“Beloit”), a former majority owned subsidiary, and us in federal bankruptcy court seeking “at least” $10.0 million in severance benefits and penalties, plus interest, on behalf of former Beloit employees. DWD’s claim against Beloit included unpaid severance pay due under a severance policy Beloit established in 1996. Since DWD’s claims were still being litigated as of the effective date of our plan of reorganization, the plan of reorganization provided that the claim allowance process with respect to DWD’s claims would continue as long as necessary to liquidate and determine these claims. On September 21, 2010, the U.S. District Court for the District of Delaware granted judgment in our favor. DWD then filed a post-judgment motion asking the court to change its decision. That motion was denied and stricken by the court on November 22, 2011. Any appeal by DWD was due on December 22, 2011. DWD did not appeal and thus the case remains resolved in our favor and is over.

17

On July 27, 2012, we were contingently liable to banks, financial institutions, and others for approximately $304.7 million for outstanding letters of credit, bank guarantees, and surety bonds securing performance of sales contracts and other guarantees in the ordinary course of business. Of the $304.7 million, approximately $14.9 million relates to surety bonds and $9.7 million relates to outstanding letters of credit or other guarantees issued by non-U.S. banks for non-U.S. subsidiaries under locally provided credit facilities.

From time to time we and our subsidiaries become involved in proceedings relating to environmental matters. We believe that the resolution of such environmental matters will not have a materially adverse effect on our consolidated financial position, results of operations or liquidity.

14. Segment Information

We operate in two reportable segments: Underground Mining Machinery and Surface Mining Equipment. Crushing and conveying operating results related to surface applications are reported as part of the Surface Mining Equipment segment, while total crushing and conveying operating results are included with the Underground Mining Machinery segment. Eliminations consist of the surface applications of crushing and conveying included in both operating segments. On June 22, 2011 we completed the acquisition of LeTourneau. LeTourneau historically operated in three business segments, mining equipment, steel products, and drilling products. Results of LeTourneau’s mining equipment and steel products are included with our Surface Mining Equipment segment. The drilling products segment was sold on October 24, 2011 and results from the drilling products segment are classified as discontinued operations. On December 29, 2011, we obtained control of IMM. IMM is a leading designer and manufacturer of underground coal mining equipment in China. The results of operations for IMM have been included in the Underground Mining Machinery segment from the acquisition date forward.

	Underground		Surface
	Mining		Mining
In thousands	Machinery		Equipment		Corporate			Eliminations			Total
Quarter ended July 27, 2012
Net sales	$	754,082	$	675,555	$	—		$	(40,914	)	$	1,388,723
Operating income (loss)		166,753		154,551		(12,770	)		(9,059	)		299,475
Interest and reorganization items		—		—		(16,802	)		—			(16,802	)
Income (loss) from continuing operations before income taxes	$	166,753	$	154,551	$	(29,572	)	$	(9,059	)	$	282,673
Depreciation and amortization	$	25,389	$	13,539	$	554		$	—		$	39,482
Capital expenditures	$	25,412	$	28,149	$	1,637		$	—		$	55,198
Total assets	$	3,870,509	$	2,185,059	$	251,809		$	—		$	6,307,377
Quarter ended July 29, 2011
Net sales	$	669,179	$	507,552	$	—		$	(40,379	)	$	1,136,352
Operating income (loss)		156,437		113,760		(24,392	)		(9,813	)		235,992
Interest and reorganization items		—		—		(6,032	)		—			(6,032	)
Income (loss) from continuing operations before income taxes	$	156,437	$	113,760	$	(30,424	)	$	(9,813	)	$	229,960
Depreciation and amortization	$	10,618	$	8,344	$	59		$	—		$	19,021
Capital expenditures	$	8,546	$	12,745	$	800		$	—		$	22,091
Total assets	$	2,017,105	$	2,512,387	$	400,866		$	—		$	4,930,358

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Nine Months ended July 27, 2012
Net sales	$	2,279,937	$	1,900,206	$	—		$	(114,159	)	$	4,065,984
Operating income (loss)		500,181		407,380		(35,338	)		(25,565	)		846,658
Interest and reorganization items		—		—		(49,999	)		—			(49,999	)
Income (loss) from continuing operations before income taxes	$	500,181	$	407,380	$	(85,337	)	$	(25,565	)	$	796,659
Depreciation and amortization	$	71,604	$	46,937	$	1,285		$	—		$	119,826
Capital expenditures	$	76,432	$	88,140	$	4,718		$	—		$	169,290
Total assets	$	3,870,509	$	2,185,059	$	251,809		$	—		$	6,307,377
Nine Months ended July 29, 2011
Net sales	$	1,828,481	$	1,333,372	$	—		$	(93,240	)	$	3,068,613
Operating income (loss)		406,807		290,673		(50,548	)		(23,080	)		623,852
Interest and reorganization items		—		—		(13,635	)		—			(13,635	)
Income (loss) from continuing operations before income taxes	$	406,807	$	290,673	$	(64,183	)	$	(23,080	)	$	610,217
Depreciation and amortization	$	30,769	$	19,725	$	175		$	—		$	50,669
Capital expenditures	$	39,359	$	35,030	$	800		$	—		$	75,189
Total assets	$	2,017,105	$	2,512,387	$	400,866		$	—		$	4,930,358

15. Recent Accounting Pronouncements

In July 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2012-02, “Intangibles – Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment.” ASU No. 2012-02 provides us the option to perform a qualitative assessment to determine whether further indefinite-lived intangible asset impairment testing is necessary. If, as a result of the qualitative assessment, it is determined that it is more likely than not that an indefinite-lived intangible asset is impaired, the quantitative impairment test is required. Otherwise, no further testing is required. ASU 2012-02 will be effective for the indefinite-lived impairment tests performed in fiscal 2013, with early adoption permitted. The adoption is not expected to have any impact on our financial condition or results of operations.

In September 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-08, “Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment.” ASU No. 2011-08 provides us the option to perform a qualitative assessment to determine whether further goodwill impairment testing is necessary. If, as a result of the qualitative assessment, it is determined that it is more likely than not that a reporting unit’s fair value is less than its carrying amount, the two-step quantitative impairment test is required. Otherwise, no further testing is required. ASU 2011-08 will be effective for the goodwill impairment tests performed in fiscal 2013, with early adoption permitted. The adoption is not expected to have any impact on our financial condition or results of operations.

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In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220): Presentation of Comprehensive Income.” ASU No. 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of shareholders’ equity. ASU 2011-05 will be effective for the quarter ending January 25, 2013. The adoption of this guidance will have no impact on our financial condition or results of operations but will impact the presentation of the financial statements. We are currently evaluating the presentation options.

16. Subsidiary Guarantors

The following tables present condensed consolidated financial information of continuing operations as of July 27, 2012 and October 28, 2011 and for the quarter and nine months ended July 27, 2012 and July 29, 2011 for: (a) the Company; (b) on a combined basis, the guarantors of the Credit Agreement, the Term Loan, the Further Term Loan and Senior Notes issued in November 2006, which include the significant domestic operations of Joy Technologies Inc., P&H Mining Equipment Inc., N.E.S. Investment Co., LeTourneau Technologies, Inc., Continental Crushing & Conveying Inc., and certain immaterial wholly owned subsidiaries of LeTourneau Technologies, Inc. (the “Subsidiary Guarantors”); and (c) on a combined basis, the non-guarantors, which include all of our foreign subsidiaries and a number of small domestic subsidiaries (the “Non-Guarantor Subsidiaries”).

The borrowings are fully and unconditionally guaranteed on a joint and several unsecured basis by the Subsidiary Guarantors, which are direct and indirect wholly owned subsidiaries of the Company. We conduct all of our business and derive essentially all of our income from our subsidiaries. Therefore, our ability to make payments on the obligations is dependent on the earnings and distribution of funds from our subsidiaries. There are no restrictions on the ability of any of our domestic subsidiaries to transfer funds to the parent company. Separate financial statements of the Subsidiary Guarantors are not presented because we believe such separate statements or disclosures would not be useful to investors.

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Condensed Consolidating Statement of Income

Quarter Ended July 27, 2012

(In thousands)

	Parent			Subsidiary			Non-Guarantor
	Company			Guarantors			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	882,063		$	903,075		$	(396,415	)	$	1,388,723
Cost of sales		—			601,153			643,506			(331,720	)		912,939
Product development, selling and administrative expenses		12,735			83,931			82,770			—			179,436
Other (income) expense		—			4,761			(7,888	)		—			(3,127	)
Operating income (loss)		(12,735	)		192,218			184,687			(64,695	)		299,475
Intercompany items		15,726			(13,306	)		(25,577	)		23,157			—
Interest income (expense)—net		(17,712	)		256			654			—			(16,802	)
Reorganization items		—			—			—			—			—
Income (loss) from continuing operations before income taxes and equity		(14,721	)		179,168			159,764			(41,538	)		282,673
Provision (benefit) for income taxes		(10,833	)		82,093			17,031			—			88,291
Equity in income (loss) of subsidiaries		198,270			86,701			—			(284,971	)		—
Income from continuing operations		194,382			183,776			142,733			(326,509	)		194,382
Income from continuing operations attributable to non-controlling interest		(38	)		—			(38	)		38			(38	)
Income from continuing operations attributable to Joy Global Inc.	$	194,344		$	183,776		$	142,695		$	(326,471	)	$	194,344

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Condensed Consolidating Statement of Income

Quarter Ended July 29, 2011

(In thousands)

	Parent			Subsidiary			Non-Guarantor
	Company			Guarantors			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	712,779		$	718,079		$	(294,506	)	$	1,136,352
Cost of sales		—			476,603			488,767			(225,744	)		739,626
Product development, selling and administrative expenses		24,102			80,652			60,571			—			165,325
Other (income) expense		—			15,975			(20,566	)		—			(4,591	)
Operating income (loss)		(24,102	)		139,549			189,307			(68,762	)		235,992
Intercompany items		4,778			(7,054	)		(34,681	)		36,957			—
Interest income (expense)—net		(8,687	)		382			2,273			—			(6,032	)
Reorganization items		—			—			—			—			—
Income (loss) from continuing operations before income taxes and equity		(28,011	)		132,877			156,899			(31,805	)		229,960
Provision (benefit) for income taxes		(29,103	)		56,015			31,243			—			58,155
Equity in income (loss) of subsidiaries		170,713			41,721			—			(212,434	)		—
Income (loss) from continuing operations	$	171,805		$	118,583		$	125,656		$	(244,239	)	$	171,805

22

Condensed Consolidating Statement of Income

Nine Months Ended July 27, 2012

(In thousands)

	Parent			Subsidiary			Non-Guarantor
	Company			Guarantors			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	2,454,780		$	2,678,424		$	(1,067,220	)	$	4,065,984
Cost of sales		—			1,679,986			1,905,797			(869,379	)		2,716,404
Product development, selling and administrative expenses		55,394			252,567			224,864			—			532,825
Other (income) expense		—			16,901			(46,804	)		—			(29,903	)
Operating income (loss)		(55,394	)		505,326			594,567			(197,841	)		846,658
Intercompany items		48,219			(37,684	)		(79,708	)		69,173			—
Interest income (expense)—net		(52,244	)		420			1,825			—			(49,999	)
Reorganization items		—			—			—			—			—
Income (loss) from continuing operations before income taxes and equity		(59,419	)		468,062			516,684			(128,668	)		796,659
Provision (benefit) for income taxes		(43,965	)		215,417			70,354			—			241,806
Equity in income (loss) of subsidiaries		570,307			258,183			—			(828,490	)		—
Income from continuing operations		554,853			510,828			446,330			(957,158	)		554,853
Income from continuing operations attributable to non-controlling interest		(180	)		—			(180	)		180			(180	)
Income from continuing operations attributable to Joy Global Inc.	$	554,673		$	510,828		$	446,150		$	(956,978	)	$	554,673

23

Condensed Consolidating Statement of Income

Nine Months Ended July 29, 2011

(In thousands)

	Parent			Subsidiary			Non-Guarantor
	Company			Guarantors			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	1,945,694		$	1,880,908		$	(757,989	)	$	3,068,613
Cost of sales		—			1,305,519			1,293,895			(585,799	)		2,013,615
Product development, selling and administrative expenses		49,760			215,577			173,648			—			438,985
Other (income) expense		—			51,059			(58,898	)		—			(7,839	)
Operating income (loss)		(49,760	)		373,539			472,263			(172,190	)		623,852
Intercompany items		31,014			(33,920	)		(82,808	)		85,714			—
Interest income (expense)—net		(23,637	)		2,141			7,896			—			(13,600	)
Reorganization items		(35	)		—			—			—			(35	)
Income (loss) from continuing operations before income taxes and equity		(42,418	)		341,760			397,351			(86,476	)		610,217
Provision (benefit) for income taxes		(51,481	)		136,937			88,752			—			174,208
Equity in income (loss) of subsidiaries		426,946			152,658			—			(579,604	)		—
Income (loss) from continuing operations	$	436,009		$	357,481		$	308,599		$	(666,080	)	$	436,009

Condensed Consolidating Balance Sheets:

As of July 27, 2012

(In thousands)

	Parent			Subsidiary		Non-Guarantor
	Company			Guarantors		Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets	$	216,613		$	1,293,597	$	2,064,135		$	(237,505	)	$	3,336,840
Property, plant and equipment-net		12,784			366,762		399,689			—			779,235
Intangible assets-net		—			834,851		1,147,929			—			1,982,780
Other assets		4,091,090			2,357,603		1,795,319			(8,035,490	)		208,522
Total assets	$	4,320,487		$	4,852,813	$	5,407,072		$	(8,272,995	)	$	6,307,377
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities	$	93,803		$	892,166	$	1,041,543		$	(97,327	)	$	1,930,185
Current liabilities of discontinued operation		—			49,322		(30,713	)		—			18,609
Long-term debt		1,537,108			1,321		31			—			1,538,460
Accrued pension costs		191,598			6,789		6,424			—			204,811
Other non-current liabilities		(1,217	)		12,505		104,829			—			116,117
Total liabilities		1,821,292			962,103		1,122,114			(97,327	)		3,808,182
Shareholders’ equity		2,499,195			3,890,710		4,284,958			(8,175,668	)		2,499,195
Total liabilities and shareholders’ equity	$	4,320,487		$	4,852,813	$	5,407,072		$	(8,272,995	)	$	6,307,377

24

As of October 28, 2011

(In thousands)

	Parent		Subsidiary		Non-Guarantor
	Company		Guarantors		Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets	$	1,053,875	$	1,224,326	$	1,508,026	$	(222,220	)	$	3,564,007
Property, plant and equipment-net		1,530		324,505		213,536		—			539,571
Intangible assets-net		—		792,972		20,947		—			813,919
Other assets		2,632,946		1,966,826		1,182,149		(5,273,064	)		508,857
Total assets	$	3,688,351	$	4,308,629	$	2,924,658	$	(5,495,284	)	$	5,426,354
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities	$	61,269	$	909,006	$	854,915	$	(100,619	)	$	1,724,571
Long-term debt		1,354,704		1,638		70		—			1,356,412
Accrued pension costs		318,173		6,950		7,329		—			332,452
Other non-current liabilities		2,410		9,373		49,341		—			61,124
Total liabilities		1,736,556		926,967		911,655		(100,619	)		3,474,559
Shareholders’ equity attributable to Joy Global Inc.		1,951,795		3,381,662		2,013,003		(5,394,665	)		1,951,795
Noncontrolling interest		—		—		—		—			—
Total equity		1,951,795		3,381,662		2,013,003		(5,394,665	)		1,951,795
Total liabilities and shareholders’ equity	$	3,688,351	$	4,308,629	$	2,924,658	$	(5,495,284	)	$	5,426,354

Condensed Consolidating Statement of Cash Flows:

Nine Months Ended July 27, 2012

(In thousands)

	Parent			Subsidiary			Non-Guarantor
	Company			Guarantors			Subsidiaries			Consolidated
Net cash provided (used) by operating activities – continuing operations	$	33,027		$	99,643		$	120,351		$	253,021
Net cash used by operating activities – discontinued operations		—			(15,747	)		—			(15,747	)
Net cash provided (used) by operating activities		33,027			83,896			120,351			237,274
Investing Activities:
Acquisition of controlling interest in IMM, net of cash acquired		(1,028,829	)		—			72,912			(955,917	)
Withdrawal of cash held in escrow		866,000			—			—			866,000
Other		(4,852	)		(85,481	)		(71,838	)		(162,171	)
Net cash provided (used) by investing activities – continuing operations		(167,681	)		(85,481	)		1,074			(252,088	)
Net cash used by investing activities – discontinued operations		—			—			—			—
Net cash provided (used) by investing activities		(167,681	)		(85,481	)		1,074			(252,088	)
Net cash provided by financing activities – continuing operations		199,162			(300	)		(11,965	)		186,897
Net cash used by financing activities – discontinued operations		—			—			—			—
Net cash provided (used) by financing activities		199,162			(300	)		(11,965	)		186,897
Effect of exchange rate changes on cash and cash equivalents		—			—			(6,167	)		(6,167	)
Increase (decrease) in cash and cash equivalents		64,508			(1,885	)		103,293			165,916
Cash and cash equivalents at beginning of period		100,181			16,152			171,988			288,321
Cash and cash equivalents at end of period	$	164,689		$	14,267		$	275,281		$	454,237

25

Nine Months Ended July 29, 2011

(In thousands)

	Parent			Subsidiary			Non-Guarantor
	Company			Guarantors			Subsidiaries			Consolidated
Net cash provided by operating activities – continuing operations	$	285,682		$	35,685		$	24,767		$	346,134
Net cash used by operating activities – discontinued operations		—			(2,444	)		—			(2,444	)
Net cash provided by operating activities		285,682			33,241			24,767			343,690
Investing Activities:
Investment in IMM		(140,613	)		—			—			(140,613	)
Acquisition of LeTourneau		(1,041,161	)		—			—			(1,041,161	)
Other		(1,029	)		(43,370	)		(28,276	)		(72,675	)
Net cash used by investing activities – continuing operations		(1,182,803	)		(43,370	)		(28,276	)		(1,254,449	)
Net cash used by investing activities – discontinued operations		—			(361	)		—			(361	)
Net cash used by investing activities		(1,182,803	)		(43,731	)		(28,276	)		(1,254,810	)
Share-based payment awards		70,426			—			—			70,426
Changes in short and long-term obligations, net		500,000			2,436			6,425			508,861
Other		(64,305	)		—			—			(64,305	)
Net cash provided by financing activities – continuing operations		506,121			2,436			6,425			514,982
Net cash provided by financing activities – discontinued operations		—			—			—			—
Net cash provided by financing activities		506,121			2,436			6,425			514,982
Effect of exchange rate changes on cash and cash equivalents		—			—			23,649			23,649
Increase (decrease) in cash and cash equivalents		(391,000	)		(8,054	)		26,565			(372,489	)
Cash and cash equivalents at beginning of period		439,295			16,262			360,024			815,581
Cash and cash equivalents at end of period	$	48,295		$	8,208		$	386,589		$	443,092

17. Supplemental Subsidiary Guarantors

The following tables present condensed consolidated financial information as of July 27, 2012 and October 28, 2011 and for the quarter and nine months ended July 27, 2012 for: (a) the Company; (b) on a combined basis, the guarantors of the 2021 Notes issued in October 2011, which include Joy Technologies Inc., P&H Mining Equipment Inc., N.E.S. Investment Co., Continental Crushing & Conveying Inc. and LeTourneau Technologies, Inc. (the “Supplemental Subsidiary Guarantors”); and (c) on a combined basis, the non-guarantors, which include all of our foreign subsidiaries and a number of small domestic subsidiaries (“Non-Guarantor Subsidiaries”).

The borrowings are fully and unconditionally guaranteed on a joint and several unsecured basis by the Supplemental Subsidiary Guarantors, which are direct and indirect wholly owned subsidiaries of the Company. We conduct all of our business and derive essentially all of our income from our subsidiaries. Therefore, our ability to make payments on the obligations is dependent on the earnings and distribution of funds from our subsidiaries. There are no restrictions on the ability of any of our domestic subsidiaries to transfer funds to the parent company. Separate financial statements of the Supplemental Subsidiary Guarantors are not presented because we believe such separate statements or disclosures would not be useful to investors.

26

Condensed Consolidating Statement of Income

Quarter Ended July 27, 2012

(In thousands)

				Supplemental
	Parent			Subsidiary			Non-Guarantor
	Company			Guarantors			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	839,498		$	945,640		$	(396,415	)	$	1,388,723
Cost of sales		—			568,833			675,826			(331,720	)		912,939
Product development, selling and administrative expenses		12,735			77,873			88,828			—			179,436
Other (income) expense		—			5,182			(8,309	)		—			(3,127	)
Operating income (loss)		(12,735	)		187,610			189,295			(64,695	)		299,475
Intercompany items		15,726			(13,306	)		(25,577	)		23,157			—
Interest income (expense)—net		(17,712	)		254			656			—			(16,802	)
Reorganization items		—			—			—			—			—
Income (loss) from continuing operations before income taxes and equity		(14,721	)		174,558			164,374			(41,538	)		282,673
Provision (benefit) for income taxes		(10,833	)		82,093			17,031			—			88,291
Equity in income (loss) of subsidiaries		198,270			91,311			—			(289,581	)		—
Income from continuing operations		194,382			183,776			147,343			(331,119	)		194,382
Income from continuing operations attributable to non-controlling interest		(38	)		—			(38	)		38			(38	)
Income from continuing operations attributable to Joy Global Inc.	$	194,344		$	183,776		$	147,305		$	(331,081	)	$	194,344

27

Condensed Consolidating Statement of Income

Nine Months Ended July 27, 2012

(In thousands)

				Supplemental
	Parent			Subsidiary			Non-Guarantor
	Company			Guarantors			Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	2,412,215		$	2,720,989		$	(1,067,220	)	$	4,065,984
Cost of sales		—			1,647,666			1,938,117			(869,379	)		2,716,404
Product development, selling and administrative expenses		55,394			246,509			230,922			—			532,825
Other (income) expense		—			17,322			(47,225	)		—			(29,903	)
Operating income (loss)		(55,394	)		500,718			599,175			(197,841	)		846,658
Intercompany items		48,219			(37,684	)		(79,708	)		69,173			—
Interest income (expense)—net		(52,244	)		418			1,827			—			(49,999	)
Reorganization items		—			—			—			—			—
Income (loss) from continuing operations before income taxes and equity		(59,419	)		463,452			521,294			(128,668	)		796,659
Provision (benefit) for income taxes		(43,965	)		215,417			70,354			—			241,806
Equity in income (loss) of subsidiaries		570,307			262,793			—			(833,100	)		—
Income from continuing operations		554,853			510,828			450,940			(961,768	)		554,853
Income from continuing operations attributable to non-controlling interest		(180	)		—			(180	)		180			(180	)
Income from continuing operations attributable to Joy Global Inc.	$	554,673		$	510,828		$	450,760		$	(961,588	)	$	554,673

28

Condensed Consolidating Balance Sheets:

As of July 27, 2012

(In thousands)

				Supplemental
	Parent			Subsidiary		Non-Guarantor
	Company			Guarantors		Subsidiaries			Eliminations			Consolidated
ASSETS
Current assets	$	216,613		$	1,257,006	$	2,100,726		$	(237,505	)	$	3,336,840
Property, plant and equipment-net		12,784			360,712		405,739			—			779,235
Intangible assets-net		—			834,851		1,147,929			—			1,982,780
Other assets		4,091,090			2,346,281		1,806,641			(8,035,490	)		208,522
Total assets	$	4,320,487		$	4,798,850	$	5,461,035		$	(8,272,995	)	$	6,307,377
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities	$	93,803		$	885,524	$	1,048,185		$	(97,327	)	$	1,930,185
Current liabilities of discontinued operation		—			49,322		(30,713	)		—			18,609
Long-term debt		1,537,108			1,321		31			—			1,538,460
Accrued pension costs		191,598			6,789		6,424			—			204,811
Other non-current liabilities		(1,217	)		12,585		104,749			—			116,117
Total liabilities		1,821,292			955,541		1,128,676			(97,327	)		3,808,182
Shareholders’ equity		2,499,195			3,843,309		4,332,359			(8,175,668	)		2,499,195
Total liabilities and shareholders’ equity	$	4,320,487		$	4,798,850	$	5,461,035		$	(8,272,995	)	$	6,307,377

As of October 28, 2011

(In thousands)

			Supplemental
	Parent		Subsidiary		Non-Guarantor
	Company		Guarantors		Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets	$	1,053,875	$	1,180,749	$	1,551,603	$	(222,220	)	$	3,564,007
Property, plant and equipment-net		1,530		316,377		221,664		—			539,571
Intangible assets-net		—		792,972		20,947		—			813,919
Other assets		2,632,946		1,966,826		1,182,149		(5,273,064	)		508,857
Total assets	$	3,688,351	$	4,256,924	$	2,976,363	$	(5,495,284	)	$	5,426,354
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities	$	61,269	$	900,871	$	863,050	$	(100,619	)	$	1,724,571
Long-term debt		1,354,704		1,638		70		—			1,356,412
Accrued pension costs		318,173		6,950		7,329		—			332,452
Other non-current liabilities		2,410		9,373		49,341		—			61,124
Shareholders’ equity		1,951,795		3,338,092		2,056,573		(5,394,665	)		1,951,795
Total liabilities and shareholders’ equity	$	3,688,351	$	4,256,924	$	2,976,363	$	(5,495,284	)	$	5,426,354

29

Condensed Consolidating Statement of Cash Flows:

Nine Months Ended July 27, 2012

(In thousands)

				Supplemental
	Parent			Subsidiary			Non-Guarantor
	Company			Guarantors			Subsidiaries			Consolidated
Net cash provided (used) by operating activities – continuing operations	$	33,027		$	98,224		$	121,770		$	253,021
Net cash used by operating activities – discontinued operations		—			(15,747	)		—			(15,747	)
Net cash provided (used) by operating activities		33,027			82,477			121,770			237,274
Investing Activities:
Acquisition of controlling interest in IMM, net of cash acquired		(1,028,829	)		—			72,912			(955,917	)
Withdrawal of cash held in escrow		866,000			—			—			866,000
Other		(4,852	)		(86,573	)		(70,746	)		(162,171	)
Net cash provided (used) by investing activities – continuing operations		(167,681	)		(86,573	)		2,166			(252,088	)
Net cash used by investing activities – discontinued operations		—			—			—			—
Net cash provided (used) by investing activities		(167,681	)		(86,573	)		2,166			(252,088	)
Net cash used by financing activities – continuing operations		199,162			(300	)		(11,965	)		186,897
Net cash used by financing activities – discontinued operations		—			—			—			—
Net cash used by financing activities		199,162			(300	)		(11,965	)		186,897
Effect of exchange rate changes on cash and cash equivalents		—			—			(6,167	)		(6,167	)
Increase (decrease) in cash and cash equivalents		64,508			(4,396	)		105,804			165,916
Cash and cash equivalents at beginning of period		100,181			16,152			171,988			288,321
Cash and cash equivalents at end of period	$	164,689		$	11,756		$	277,792		$	454,237

18. Subsequent Events

On August 17, 2012, our Board of Directors declared a cash dividend of $0.175 per outstanding share of common stock. The dividend will be paid on September 18, 2012 to all shareholders of record at the close of business on September 4, 2012.

30

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

The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes to the Condensed Consolidated Financial Statements in Item 1 of this Quarterly Report on Form 10-Q. Dollar amounts are in thousands, except share and per share data and as indicated.

Overview

Joy Global Inc. is a worldwide leader in high-productivity mining solutions. We manufacture and market original equipment and aftermarket parts and services for both underground and surface mining and certain industrial applications through two business segments: Underground Mining Machinery and Surface Mining Equipment. We are a major manufacturer of underground mining equipment for the extraction of coal and other bedded minerals and offer comprehensive service locations near major mining regions worldwide. We are also a major producer of surface mining equipment for the extraction of ores and minerals and we provide extensive operational support for many types of equipment used in surface mining. Our principal manufacturing facilities are located in the United States, including facilities in Pennsylvania, Wisconsin, Kentucky, Texas and Alabama and international facilities in China, the United Kingdom, South Africa, Canada, Chile and Australia.

International Mining Machinery

On July 11, 2011, we entered into a Share Purchase Agreement (“SPA”) with TJCC Holdings Limited, a corporation controlled by The Jordan Company, L.P., to acquire approximately 41.1%, of IMM. IMM is a leading designer and manufacturer of underground coal mining equipment in China. On July 28, 2011, August 16, 2011 and September 2, 2011 we purchased shares on the open market representing an aggregate of approximately 28.1% of the total outstanding shares of IMM. On December 20, 2011, the Anti-monopoly Bureau of the Ministry of Commerce of the People’s Republic of China approved the purchase of IMM shares covered by the SPA and the acquisition closed on December 29, 2011. At such time, we acquired a controlling interest in IMM which, when aggregated with earlier open market purchases, was approximately 69.2% of IMM’s outstanding common stock. Upon closing, we recognized a $19.4 million gain on the re-measurement of our pre-existing equity interest in IMM. On January 6, 2012, in accordance with Rule 26.1 of the Hong Kong Takeovers Code, we commenced an unconditional cash tender offer to purchase the remaining outstanding IMM shares and options to purchase IMM shares that we did not own. On February 10, 2012, we completed the tender offer. As a result of the tender offer, our beneficial ownership of IMM common stock increased to approximately 98.9%, for which we had paid aggregate consideration of approximately $1.4 billion. On July 25, 2012, we effected the compulsory acquisition of the remaining shares under applicable provisions of the Cayman Island Companies Law, under which IMM is incorporated. We paid consideration of approximately $16.2 million to complete the compulsory acquisition, using the remaining cash held in escrow. The combined effect of these transactions resulted in our beneficial ownership of 100% of the common stock of IMM.

Operating Results

Bookings in the third quarter of 2012 were approximately $1.1 billion, a decrease of 25.1% from the prior year third quarter. Original equipment bookings decreased $367.1 million, or 48.2%, while aftermarket bookings increased $4.0 million or 0.6%. The Surface Mining Equipment segment original equipment bookings excluding LeTourneau decreased 65.8% and the Underground Mining Machinery segment original equipment bookings excluding IMM decreased 54.7%. Overall, original equipment orders declined primarily due to a soft coal market in the U.S. and China and an order for a roof support system in Russia in 2011 that did not reoccur in the current period. Original equipment bookings decreased in all regions with the exception of South Africa. Aftermarket bookings in Surface Mining Equipment excluding LeTourneau decreased 2.1% when compared to the prior year third quarter, while aftermarket orders in Underground Mining Machinery excluding IMM increased 1.7%. Aftermarket orders were also negatively impacted by the soft coal market. Foreign currency translation unfavorably impacted bookings by $61.7 million when compared to the prior year third quarter.

31

Net sales in the third quarter of 2012 were approximately $1.4 billion, compared to approximately $1.1 billion in the third quarter of 2011. The 22.2% increase in net sales in the current year third quarter includes a $77.8 million increase in aftermarket sales, primarily in parts and rebuilds, and a $174.6 million increase in original equipment sales, primarily due to acquisitions and shovels. Sales increased in most regions for both segments. Foreign currency translation unfavorably impacted sales by $35.0 million when compared to the third quarter of the prior year.

Operating income in the third quarter of 2012 increased by $63.5 million to $299.5 million, which represented a 25% incremental profitability on the increase in sales, as lower employee costs were partially offset by an increase in unfavorable manufacturing variances, and selling, engineering and administrative expenses. Incremental profitability is calculated by dividing the change in operating income by the change in net sales over a stated period. Management believes this is an important measure in determining the efficiency of our operations.

The results of LeTourneau’s mining equipment business are included with our Surface Mining Equipment segment. For the third quarter of 2012, LeTourneau’s mining equipment business had bookings of $91.7 million, net sales of $110.9 million and operating income of $20.1 million. Operating income was negatively impacted by $2.1 million for non-recurring purchase accounting charges, of which $1.5 million was attributable to the step-up of acquired inventories.

The results of IMM are included with our Underground Mining Machinery segment. For the third quarter of 2012, IMM had bookings of $64.6 million, net sales of $69.1 million and operating income of $2.8 million. Operating income was negatively impacted by $7.7 million for non-recurring purchase accounting charges, of which $3.2 million was attributable to the step-up of acquired inventories.

Net income from continuing operations attributable to Joy Global was $194.3 million or $1.82 per diluted share in the third quarter of 2012, compared to $171.8 million or $1.61 per diluted share in 2011.

Bookings in the first nine months of fiscal 2012 were approximately $3.7 billion, a decrease of 10.7% from the prior year nine month period. Original equipment bookings decreased $598.9 million or 27.6%, while aftermarket bookings increased $148.9 million or 7.3%. The Surface Mining Equipment segment original equipment bookings excluding LeTourneau decreased 33.3% while original equipment bookings for the Underground Mining Machinery segment excluding IMM decreased 43.6%. Overall, original equipment bookings declined primarily due to a weakening coal market in the U.S. and China and significant Australian and Russian bookings in the prior year that did not reoccur in the current year. Surface Mining Equipment aftermarket bookings excluding LeTourneau increased 5.9% when compared to the prior year while Underground Mining Machinery aftermarket bookings excluding IMM increased 2.9%. Aftermarket orders were stronger in all regions except North America and Eurasia. Foreign currency translation unfavorably impacted bookings by $93.6 million when compared to the prior year nine months.

Net sales in the first nine months of fiscal 2012 were approximately $4.1 billion, compared to approximately $3.1 billion in the first nine months of 2011. The 32.5% increase in net sales in the first nine months of 2012 includes a $284.5 million increase in aftermarket sales and a $712.9 million increase in original equipment sales. Sales increased in most regions for both segments. Foreign currency translation unfavorably impacted sales by $44.1 million when compared to the first nine months of the prior year.

Operating income in the first nine months of fiscal 2012 increased by $222.8 million to $846.7 million, which represented 22% incremental profitability on higher sales volume as a reduction in employee costs were partially offset by an increase in product development, selling and administrative expenses.

The results of LeTourneau’s mining equipment business are included with our Surface Mining Equipment segment. For the first nine months of fiscal 2012, LeTourneau’s mining equipment business had bookings of $304.4 million, net sales of $322.4 million and operating income of $43.8 million. Operating income was negatively impacted by $13.7 million for non-recurring purchase accounting charges, of which $11.5 million was attributable to the step-up of acquired inventories.

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The results of IMM are included with our Underground Mining Machinery segment. From the date of acquisition and consolidation, IMM had bookings of $177.6 million, net sales of $166.9 million and operating income of $7.3 million. Operating income was negatively impacted by $25.4 million for non-recurring purchase accounting charges, of which $20.9 million was attributable to the step-up of acquired inventories.

Net income from continuing operations attributable to Joy Global was $554.7 million, or $5.19 per diluted share in the first nine months of fiscal 2012 compared to $436.0 million or $4.09 per diluted share in 2011.

Market Outlook

The demand for commodities has slowed, adjusting to weaker global economic growth. Recent economic data is mixed, but is generally consistent with low U.S. growth, Europe contracting and China decelerating. With demand slowing, recent capacity additions have created supply surpluses and depressed pricing for most commodities. Customers are responding by cutting capital expenditures, reducing overhead and trimming production. Production cuts have been greatest in U.S. coal, but the closure or reduction of higher cost coal mines is also in process in Australia and Russia.

As noted, U.S. coal has experienced the most severe decline, driven primarily by lower electricity demand and electricity generators switching to natural gas. Electricity demand in the U.S. was down over 5% during the winter heating season, which is greater than the 4% decline in 2009 that resulted from the global recession. On top of slowing demand, shale gas production has been expanding rapidly and creating a significant surplus of natural gas in the U.S. This has depressed natural gas prices to 10-year lows and also has increased the dispatch of gas fired generation onto the electricity grid. As a result, coal’s share of electricity generation has dropped from 43% to 32% between 2006 and April of 2012 while the natural gas share increased from 18% to 32% over the same period. Coal production in the second calendar quarter was down by 104 million tons from the first calendar quarter on an annualized basis. It is estimated that cuts of 100 to 120 million tons are needed to balance the U.S. market. However, those reductions can be reduced if power generation is switched from natural gas back to coal.

Current natural gas prices are below the cost of drilling programs, and the number of rigs drilling for natural gas declined in August to the lowest level in over a decade. Natural gas prices need to be above $4.00 per million BTUs to generate adequate returns in most shale gas regions. This is supported by the futures strip, which trends up and moves above $4.00 per million BTUs by 2014. Various forecasts project natural gas prices approaching this level a year sooner. Natural gas switching reached a peak in April as prices dipped below $2.00 per million BTUs, but switching back to coal has occurred as natural gas prices recently moved toward $3.00 per million BTUs. The first beneficiary of coal switching is Powder River Basin coal, and its rail car loadings increased by 16% from June to July. The longer term confidence that our customers have in Powder River Basin demand is evidenced by the increased acreage that has been leased in the past few months. Coal switching will also benefit the Illinois Basin, Northern Appalachia and Central Appalachia, as natural gas prices move progressively from $3.00 per million BTUs to $4.50 per million BTUs.

It is believed that a significant portion of coal’s share loss to natural gas can be recovered as natural gas prices increase. However, this may take a couple of years. In addition, most of the available excess capacity in power generation now resides in coal-fired units, and this will provide another upside for coal as power demand returns to normal levels. U.S. coal will also benefit from exports that tap into the growing demand in the seaborne markets. Europe is one of the main markets for U.S. Eastern coal, and its coal demand has been growing at 12%. In addition, two-thirds of its 36 gigawatts of new generating capacity will be coal-fired. U.S. customers also see Asia to be undersupplied in the long term. In response, they have announced increases in port capacity to 270 million tons to capture the expected opportunities in the export markets.

China’s economy continues to decelerate. Demand for electricity was up 3% in May of 2012, compared to a growth rate of 10 to 11% a year ago. In addition to the effect of a slowing economy, recovery in hydropower generation has further reduced coal demand. Coal production in China has continued to increase as demand has slowed, further depressing prices. As prices dropped below $100 per tonne, imported coal gained an advantage over domestic production, and stockpiles at the domestic transfer point of Qinhuangdao increased and approached capacity. Higher cost domestic production was subsequently reduced and Beijing further mandated that domestic coal production be limited to 7% above 2011 levels. The month of July saw power demand rise 15% from June levels and 7% from last year. As a result, Qinhuangdao inventories have declined by 25% since early July, and seaborne prices have begun to recover.

Power generation in India is up 11% this year, while thermal coal imports are up 13%. Domestic production grew only 2.6% last year and it continues to fall well short of plan, putting more pressure on imports. The thinness of supply-demand was evidenced by a recent brownout that affected 600 million people, and many power plants continue to run with stockpiles of a week or less. In addition, India plans to add 97 gigawatts of coal-fired power generation over the next three to four years, requiring an additional 300 million tonnes of coal. As a result, India’s coal demand will continue to be a main driver in the seaborne market.

Turning to other commodities, strong demand from China and production limitations has kept the copper market in deficit during the first half of the year. This supply deficit increased by over 350 thousand tons compared to the first half of last year. Although China imports are expected to slow, the copper market should remain in deficit during the second half of the year.

Although global steel production is expected to be up 3 to 4% this year, this growth has occurred in the first half of the year and steel production has leveled and is expected to remain flat in the second half. This will limit demand volumes for met coal and iron ore, favoring the lower cost producers for each commodity.

China produces 42% of the global iron ore supply, but ore grades at 20% keep costs high. As a result, China becomes a swing producer above its estimated profitability threshold of $120 per tonne. Despite the current dip in spot prices, the iron ore market should find support at the $120 per tonne level, and this will favor producers in Western Australia and South America.

A high percentage of China’s met coal is mined from small mines in Shanxi province that have been the subject of safety campaigns, which has reduced supply of hard coking coal and increased costs by more than 40%. Additionally, increased use of large blast furnaces in China requires greater volumes of hard coking coal. The combination of these two factors will continue to increase met coal imports into China from the current level of 46 million tons annually.

Recent information indicates that commodity markets are stabilizing at current levels. It is expected that demand will remain relatively flat until a broader recovery in the global economy provides a catalyst for increased commodity demand and capacity expansion. In the meantime, most commodities are oversupplied or near balance. As a result, customers are slowing their capacity expansion projects. Projects already underway remain in process, but they are being slowed by additional engineering review and updated project plans. The next round of projects has been reduced, and there is an increased focus on brown field projects that have shorter time to first production and less project risk. Many larger greenfield projects have been pushed out beyond 2013. As a result, it is expected that announced capital budgets will be underspent this year, and that under current market conditions, spending for next year will be flat.

Company Outlook

The outlook for our business has continued to decline over the past quarter. Although the U.S. market has progressed in line with our expectations, the deceleration of China demand has deteriorated international markets more quickly and severely than previously expected.

The U.S. customers have adjusted quickly to their market conditions. Second quarter production was reduced on an annualized basis to a level in the range estimated to balance the market. We have seen natural gas prices start to move back to more normalized levels, and this has resulted in some switching back to coal. As a result, we see the U.S. coal market at the bottom, with opportunities to recover volume through return of power demand and switching back to coal. However, this will be a slow recovery, and therefore we must adjust to a structural change in the U.S. market. Natural gas will continue to be a competitive fuel, and this will force U.S. coal production into lower cost basins. We expect much of the production cuts in Central Appalachia to be permanent, but replaced by increases in the Illinois and Powder River basins.

The deceleration of China is also affecting those regions that are commodity exporters. Some projects no longer make the economic threshold, but most of the impact is to rationalize capital expenditures and to improve project returns though additional engineering and project management review. This results in project slowing, and in some cases, time gaps between the higher potential projects. As a result, we expect to experience greater lumpiness in original equipment bookings going forward.

Results of Operations

Quarter Ended July 27, 2012 to Quarter Ended July 29, 2011

Net Sales

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

	Quarter Ended
	July 27,			July 29,			$			%
In thousands	2012			2011			Change			Change
Net Sales
Underground Mining Machinery	$	754,082		$	669,179		$	84,903			12.7
Surface Mining Equipment		675,555			507,552			168,003			33.1
Eliminations		(40,914	)		(40,379	)		(535	)		—
Total	$	1,388,723		$	1,136,352		$	252,371			22.2

Third quarter 2012 Underground Mining Machinery net sales were $754.1 million, compared to $669.2 million in the prior year third quarter, and included a $59.9 million increase in original equipment sales and a $25.0 million increase in aftermarket sales. IMM added $69.1 million of net sales to the third quarter. The decrease in original equipment sales, excluding IMM, was driven by lower shipments in Eurasia and China, partially offset with higher shipments in Australia. Aftermarket sales increased in the United States, Australia, China, and South Africa. Foreign currency translation unfavorably impacted sales by $26.9 million.

Third quarter 2012 Surface Mining Equipment net sales were $675.6 million, compared to the $507.6 million in the prior year third quarter, and included a $114.0 million increase in original equipment sales and a $54.0 million increase in aftermarket sales. Net sales increased $67.6 million from the acquisition of LeTourneau. Original equipment sales increases were led by strong results in all regions except South Africa. Aftermarket sales were up in all regions except China. Foreign currency translation unfavorably impacted sales by $8.1 million.

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Operating Income

The following table sets forth the operating income (loss) included in our Condensed Consolidated Statement of Income.

	Quarter Ended
	July 27, 2012					July 29, 2011
	Operating			%		Operating			%
In thousands	Income (loss)			of Net Sales		Income (loss)			of Net Sales
Underground Mining Machinery	$	166,753			22.1	$	156,437			23.4
Surface Mining Equipment		154,551			22.9		113,760			22.4
Corporate Expense		(12,770	)		—		(24,392	)		—
Eliminations		(9,059	)		—		(9,813	)		—
Total	$	299,475			21.6	$	235,992			20.8

Operating income for the Underground Mining Machinery segment was $166.8 million in the third quarter of 2012, compared to $156.4 million in the third quarter of 2011. Operating income includes $2.8 million from IMM, net of excess purchase accounting charges of $7.7 million. In addition to the $2.8 million attributable to the acquisition, operating income was favorably impacted by $4.4 million due to higher sales volumes and a $13.2 million reduction in employee costs. These items were partially offset by $6.0 million from increases in unfavorable manufacturing variances.

Operating income for the Surface Mining Equipment segment was $154.6 million in the third quarter of 2012, compared to $113.8 million in the third quarter of 2011. Operating income increased $13.9 million from the acquisition of LeTourneau, net of excess purchase accounting charges of $2.1 million. In addition to the $13.9 million attributable to the acquisition, operating income was favorably impacted by $48.9 million due to higher sales volumes. This increase was partially offset by $15.5 million from increases in unfavorable manufacturing variances and $1.0 million from increases in engineering, selling and administrative expenses.

Corporate expense decreased by $11.6 million primarily due to prior year acquisition costs of $11.7 million.

Product Development, Selling and Administrative Expense

Product development, selling and administrative expense totaled $179.4 million, or 12.9% of sales in the third quarter of 2012, compared to $165.3 million, or 14.5% of sales, in the third quarter of 2011. The inclusion of LeTourneau and IMM increased product development, selling and administrative expenses by $23.4 million, which was partially offset by the $11.6 million decrease in acquisition costs year over year.

Provision for Income Taxes

Income tax expense from continuing operations was $88.3 million in the third quarter of 2012 as compared to $58.2 million in the third quarter of 2011. The effective income tax rate was 31.2% in the current quarter compared to 25.3% in the third quarter of 2011. The effective income tax rate excluding discrete tax adjustments was 31.5% in the current quarter compared to 30.6% in the third quarter of 2011. The third quarter 2011 discrete adjustments primarily relate to a one-time discrete income tax benefit of $13.5 million related to a dividend received from a non-US subsidiary in the quarter. The increase in the third quarter 2012 effective tax rate is attributable to the non-recurrence of this one-time income tax benefit in 2012 and the continued refinement of our full year forecast of domestic and international earnings.

Bookings and Backlog

Bookings represent the cumulative amount of customer orders under new original equipment and aftermarket contracts exclusive of Life Cycle Management arrangements awarded to us during the reporting period. We record bookings when firm orders are received and add the amount of bookings in a period to our backlog. Bookings for the third quarter of 2012 and 2011 are the following:

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	Quarter Ended
	July 27,			July 29,			$			%
In thousands	2012			2011			Change			Change
Underground Mining Machinery	$	618,420		$	742,935		$	(124,515	)		(16.8	)
Surface Mining Equipment		541,806			755,747			(213,941	)		(28.3	)
Eliminations		(75,934	)		(51,359	)		(24,575	)		—
Total Bookings	$	1,084,292		$	1,447,323		$	(363,031	)		(25.1	)

Underground Mining Machinery original equipment orders, which included $64.6 million from IMM, decreased $130.9 million compared to the prior year quarter. The decrease in original equipment orders is due to a soft coal market in the U.S. and China and a major roof support system ordered in Russia in 2011 that did not repeat in the current period. Original equipment orders were down in all regions except South Africa. Surface Mining Equipment original equipment orders, which included an increase of $34.2 million from the acquisition of LeTourneau, decreased $241.3 million compared to the prior year quarter. Original equipment orders were down in all regions except Australia. Foreign currency translation unfavorably impacted original equipment bookings by $29.4 million.

Underground Mining Machinery aftermarket bookings increased $6.4 million compared to the prior year third quarter due to higher orders in other international markets, offset by a decrease in orders in the United States and Eurasia. Aftermarket orders for Surface Mining Equipment, which included an increase of $33.8 million from the acquisition of LeTourneau, increased $27.3 million compared to the prior year quarter. Aftermarket order declines were primarily centered in North America due to the soft U.S. coal market. These declines were partially offset by other international regions. Foreign currency translation unfavorably impacted aftermarket bookings by $32.3 million.

Backlog as of July 27, 2012 and October 28, 2011 is as follows:

	July 27,			October 28,
In thousands	2012			2011
Underground Mining Machinery	$	1,490,593		$	1,739,932
Surface Mining Equipment		1,492,961			1,560,393
Eliminations		(145,854	)		(46,991	)
Total Backlog	$	2,837,700		$	3,253,334

Backlog was $2.8 billion as of July 27, 2012 compared to $3.3 billion at October 28, 2011. The backlog at July 27, 2012 includes $57.3 million related to IMM. Backlog does not include anticipated revenues from long-term maintenance and repair contracts. Last quarter, $118.7 million in underground equipment orders scheduled for the U.S. coal market were removed from backlog as there was a reasonable risk of deferral or cancellation of these orders. During the third quarter, $63.1 million of these orders actually cancelled, while $38.1 million were completed and shipped under their original terms.

Nine Months Ended July 27, 2012 to Nine Months Ended July 29, 2011

Net Sales

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

	Nine Months Ended
	July 27,			July 29			$			%
In thousands	2012			2011			Change			Change
Net Sales
Underground Mining Machinery	$	2,279,937		$	1,828,481		$	451,456			24.7
Surface Mining Equipment		1,900,206			1,333,372			566,834			42.5
Eliminations		(114,159	)		(93,240	)		(20,919	)		—
Total	$	4,065,984		$	3,068,613		$	997,371			32.5

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Fiscal 2012 nine months Underground Mining Machinery net sales were $2.3 billion, compared to the prior year nine months of $1.8 billion, and include a $337.5 million increase in original equipment sales and a $113.9 million increase in aftermarket sales. IMM added $166.9 million of sales to the nine month period. Aftermarket sales increased in all regions with the exception of Eurasia. Original equipment sales increased in all regions. Foreign currency translation unfavorably impacted sales by $34.5 million.

Fiscal 2012 nine months Surface Mining Equipment net sales were $1.9 billion, compared to the prior year nine months of $1.3 billion, and included a $385.3 million increase in original equipment sales and a $181.6 million increase in aftermarket sales. Net sales increased $279.1 million from the acquisition of LeTourneau. Aftermarket sales increased in all regions. Original equipment sales increased in all regions with the exception of South Africa. Foreign currency translation unfavorably impacted sales by $9.6 million.

Operating Income

The following table sets forth the operating income (loss) included in our Condensed Consolidated Statement of Income:

	Nine Months Ended
	July 27, 2012					July 29, 2011
	Operating			%		Operating			%
In thousands	Income (loss)			of Net Sales		Income (loss)			of Net Sales
Underground Mining Machinery	$	500,181			21.9	$	406,807			22.2
Surface Mining Equipment		407,380			21.4		290,673			21.8
Corporate Expense		(35,338	)		—		(50,548	)		—
Eliminations		(25,565	)		—		(23,080	)		—
Total	$	846,658			20.8	$	623,852			20.3

Operating income for the Underground Mining Machinery segment was $500.2 million for the fiscal 2012 nine month period compared to operating income of $406.8 million in the prior year period. Operating income includes $7.3 million from IMM, net of non-recurring purchase accounting charges of $25.4 million. In addition to the $7.3 million attributable to IMM, operating income was favorably impacted $102.4 million due to higher sales volumes and $16.7 million due to a reduction in employee costs. These items were partially offset by $18.3 million from increases in product development, selling and administrative expenses, $15.3 million from increases in unfavorable manufacturing variances, and the aforementioned non-recurring purchase accounting charges.

Operating income for the Surface Mining Equipment segment was $407.4 million for the fiscal 2012 nine month period compared to operating income of $290.7 million in the prior year period. Operating income increased $37.6 million from the acquisition of LeTourneau, net of non-recurring purchase accounting charges of $13.7 million. In addition to the $37.6 million attributable to the acquisition, operating income was favorably impacted by $121.0 million due to higher sales volumes that were partially offset by $12.9 million from increases in product development, selling and administrative expenses and the aforementioned non-recurring purchase accounting charges.

Corporate expense decreased by $15.2 million primarily due to the IMM remeasurement gain of $19.4 million upon obtaining a controlling interest in IMM in December 2011, partially offset by an increase of $5.0 million in acquisition and other administrative costs.

Product Development, Selling and Administrative Expense

Product development, selling and administrative expense totaled $532.8 million, or 13.1% of sales, for the nine month period, compared to $439.0 million, or 14.3% of sales, for the same period in the prior year. The inclusion of LeTourneau and IMM increased expense for the nine month period by $57.0 million. In addition to the $57.0 million attributable to the acquisitions operations, product costs increased $9.7 million, selling costs increased $8.8 million, and administrative costs increased $18.5 million, inclusive of $2.7 million of higher costs associated with the acquisitions of LeTourneau and IMM.

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Provision for Income Taxes

Income tax expense for continuing operations was $241.8 million for the fiscal 2012 nine month period, compared to $174.2 million for the prior year period. The effective income tax rate was 30.4% for the nine month fiscal 2012 period compared to 28.5% for the prior year period. The effective income tax rate excluding discrete tax adjustments was 31.1% in the current nine month period compared to 29.9% for the same period in the prior year. The increase in the effective tax rate is attributable to an international restructuring that was implemented at the beginning of fiscal 2011. While global tax benefits from this international restructuring continue into fiscal 2012 and subsequent years, a substantial portion of the benefits were realized in fiscal 2011. The effective income tax rate differs from the U.S. federal corporate income tax rate primarily due to foreign tax rate differential.

Bookings

Bookings for the nine month periods indicated are the following:

	Nine Months Ended
	July 27,			July 29,			$			%
In thousands	2012			2011			Change			Change
Underground Mining Machinery	$	2,102,744		$	2,469,573		$	(366,829	)		(14.9	)
Surface Mining Equipment		1,900,423			1,862,235			38,188			2.1
Eliminations		(253,584	)		(132,180	)		(121,404	)		—
Total Bookings	$	3,749,583		$	4,199,628		$	(450,045	)		(10.7	)

Bookings for the fiscal 2012 nine month period were $3.7 billion, down 10.7% compared to bookings of $4.2 billion in the prior year period. Underground original equipment orders, which included $177.6 million from IMM, were down $400.0 million primarily due to a weakening coal market in the U.S. and China and significant orders in Australia and Russia in the prior year that did not reoccur in 2012. Original equipment orders for the surface business were down $138.7 million, which included a $159.4 million increase from the acquisition of LeTourneau, when compared to the prior year. Orders decreased in all regions with the exception of Australasia. Foreign currency translation unfavorably impacted original equipment bookings by $43.9 million.

Underground Mining Machinery aftermarket bookings increased $33.1 million for the nine month period compared to the same period in the prior year. Bookings increased in China and South Africa while all other regions experienced lower order levels. Surface Mining Equipment aftermarket orders increased $176.9 million compared to the prior year nine month period, of which $121.3 million was due to the acquisition of LeTourneau. Aftermarket orders increased in all regions with the exception of South Africa which experienced a decline. Foreign currency translation unfavorably impacted aftermarket bookings by $49.7 million.

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Liquidity and Capital Resources

The following table reconciles trade working capital related to continuing operations to total working capital related to continuing operations as of July 27, 2012 and October 28, 2011, respectively.

In thousands	July 27, 2012			October 28, 2011
Accounts receivable	$	1,148,639		$	884,696
Inventories		1,544,062			1,334,134
Accounts payable		(487,811	)		(452,519	)
Advance payments		(823,231	)		(771,841	)
Trade Working Capital	$	1,381,659		$	994,470
Other current assets		189,902			190,568
Short-term notes payable		(82,400	)		(35,895	)
Employee compensation and benefits		(129,234	)		(147,664	)
Accrued warranties		(104,208	)		(82,737	)
Other current liabilities		(303,301	)		(206,588	)
Working Capital Excluding Cash and Cash Equivalents	$	952,418		$	712,154
Cash and Cash Equivalents		454,237			288,321
Working Capital (exclusive of cash held in escrow)	$	1,406,655		$	1,000,475

IMM added $159.3 million to trade working capital at July 27, 2012.

We use trade working capital and cash flow from continuing operations as two financial measurements to evaluate the performance of our operations and our ability to meet our financial obligations. We require trade working capital investment because our service model requires us to maintain inventory levels to support our customers’ machine availability. This measurement also provides focus on our receivable terms and collection efforts and our ability to obtain advance payments on original equipment orders. As part of our continuous improvement of purchasing and manufacturing processes, we continue to strive for alignment of inventory levels with customer demand and current production schedules.

During the first nine months of fiscal 2012, cash provided by continuing operating activities was $253.0 million compared to cash provided by continuing operating activities of $346.1 million in the first nine months of 2011. An increase in net income and depreciation and amortization and decreases in inventory build were more than offset by decreases in advance payments and accounts payable and an increase in accounts receivable.

During the first nine months of fiscal 2012, cash used by continuing investing activities was $252.1 million compared to cash used by continuing investing activities of $1.3 billion during the first nine months of fiscal 2011. The decrease in cash used by investing activities was primarily due to the prior year $1.0 billion acquisition of LeTourneau. The prior year acquisition of LeTourneau was partially offset by the current year acquisition of IMM, which was mostly funded from cash held in escrow, and further capital spending for the continued investment in our global service center infrastructure and our manufacturing capabilities in emerging markets.

During the first nine months of fiscal 2012, cash provided by continuing financing activities was $186.9 million compared to cash provided by continuing financing activities of $515.0 million during the first nine months of fiscal 2011. The primary driver for the change was the prior year increase in borrowings of $500.0 million associated with the LeTourneau acquisition and reduced proceeds from share based payment awards. These decreases in cash were partially offset by the current year proceeds from the February 10, 2012 draw under the Further Term Loan.

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On May 18, 2012, our Board of Directors declared a cash dividend of $0.175 per outstanding share of common stock. The dividend was paid on June 18, 2012 to all shareholders of record at the close of business on June 4, 2012.

Retiree Benefits

For the first nine months of fiscal 2012 we have recognized $28.6 million of defined benefit pension expense compared to $37.7 million for the comparable prior year period. On February 28, 2012, we made a material modification to the Joy Global U.S. Pension Plan freezing benefits for all salaried and non-bargained hourly participants effective May 1, 2012. We recorded a $1.1 million curtailment charge in conjunction with the freeze. Through July 27, 2012, we have contributed $138.1 million to our defined benefit plans in fiscal 2012 and we plan to contribute approximately $180.0 million to $190.0 million in the aggregate for the full fiscal year. The investment performance of the pension plans’ assets along with the movement in the discount rate used to calculate the pension plans’ liabilities will determine the amount and timing of additional contributions to the pension plans in subsequent years.

Credit Agreement

We have a $700.0 million unsecured revolving credit facility under the terms of our Credit Agreement, which expires November 3, 2014. Under the terms of the Credit Agreement we pay a commitment fee ranging from 0.25% to 0.5% on the unused portion of the revolving credit facility based on our credit rating. Outstanding borrowings bear interest equal to the London Interbank Offered Rate (“LIBOR”) (defined as applicable LIBOR rate for the equivalent interest period plus 1.75% to 2.75% depending upon our credit rating) or the Base Rate (defined as the highest of the Prime Rate, Federal Funds Rate plus 0.5%, or Eurodollar Rate plus 1.0%) at our option. The Credit Agreement requires the maintenance of certain financial covenants including leverage and interest coverage ratios. The Credit Agreement also restricts payment of dividends or other return of capital when the consolidated leverage ratio exceeds a stated level amount. At July 27, 2012, we were in compliance with all financial covenants of the Credit Agreement and had no restrictions on the payment of dividends or return of capital.

Financial Condition

As of July 27, 2012, we had $454.2 million in cash and cash equivalents and $419.9 million available for borrowings under the Credit Agreement. Our current cash requirements include working capital, defined benefit pension contributions, capital expenditures, dividends, principal payments, and interest payments. We will also continue to evaluate strategic acquisitions, including mining-related product line additions or service extensions. Based upon our current and forecasted level of operations, we believe that cash flows from operations, together with cash and cash equivalents on hand, available borrowings under the Credit Agreement and access to capital markets will be adequate to meet our anticipated future cash requirements.

Off-Balance Sheet Arrangements

We lease various assets under operating leases. No significant changes to lease commitments have occurred since our year ended October 28, 2011. We have no other off-balance sheet arrangements, other than as noted in Note 13 to the Condensed Consolidated Financial Statements.

Critical Accounting Estimates, Assumptions and Policies

Our discussion and analysis of financial condition and results of operations are based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. 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, on an ongoing basis, our estimates and judgments, including those related to bad debts, excess inventory, warranty, intangible assets, income taxes, pension and postretirement benefits and costs, 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.

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We believe our accounting policies for revenue recognition, inventories, goodwill and other intangible assets, accrued warranties, pension and post-retirement benefits and costs, and income taxes 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. See Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended October 28, 2011 for a discussion of these policies. There were no material changes to these policies during the first nine months of fiscal 2012.

Recent Accounting Pronouncements

Our new accounting pronouncements are set forth under Part I, Item 1 of this Quarterly Report on Form 10-Q and are incorporated by reference.

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 October 28, 2011, we are exposed to various types of market risks, primarily foreign currency risks and volatility in interest rates. We monitor our risks on a continuous basis and generally enter into forward foreign currency contracts to minimize our foreign currency exposures. 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. There have been no material changes to our primary market risk exposures or how such risks are managed since our year ended October 28, 2011.

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 on a timely basis to the officers who certify our financial reports and to other members of senior management and the Board of Directors.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures are effective (1) in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act and (2) to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There have not been any changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during our quarter ended July 27, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

No change.

Item 1A. Risk Factors

No change.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

Item 3. Defaults upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

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Item 6. Exhibits

31.1	Chief Executive Officer Rule 13a-14(a)/15d-14(a) Certifications
31.2	Chief Financial Officer Rule 13a-14(a)/15d-14(a) Certifications
32	Section 1350 Certifications
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURE

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.

	JOY GLOBAL INC.
	(Registrant)
Date: August 30, 2012		/s/ Michael S. Olsen
		Michael S. Olsen
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer)
Date: August 30, 2012		/s/ James E. Agnew
		James E. Agnew
		Vice President, Controller
		and Chief Accounting Officer
		(Principal Accounting Officer)

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