S-1/A

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As filed with the Securities and Exchange Commission on July 6, 2004.

Registration No. 333-114326

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 3 TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

BUCYRUS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	3352 (Primary Standard Industrial Classification Code No.)	39-0188050 (I.R.S. Employer Identification No.)
P.O. Box 500 1100 Milwaukee Avenue South Milwaukee, Wisconsin 53172 (414) 768-4000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
Timothy W. Sullivan President and Chief Executive Officer Bucyrus International, Inc. P.O. Box 500 1100 Milwaukee Avenue South Milwaukee, Wisconsin 53172 (414) 768-4000 Facsimile (414) 768-5060 (Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:
Matthew J. Mallow Richard B. Aftanas Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036 (212) 735-3000 Facsimile: (212) 735-2000	Robert E. Buckholz, Jr. Sullivan & Cromwell LLP 125 Broad Street New York, NY 10004 (212) 558-4000 Facsimile: (212) 558-3588

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.

        If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o

        If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o

        If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act, please check the following box: o

CALCULATION OF REGISTRATION FEE

TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED	AMOUNT TO BE REGISTERED(1)(2)	PROPOSED MAXIMUM OFFERING PRICE PER SHARE (2)	PROPOSED MAXIMUM AGGREGATE OFFERING PRICE(1)(2)	AMOUNT OF REGISTRATION FEE(3)
Class A Common Stock, $.01 par value	9,132,353	$18.00	$164,382,354	$20,827.25

(1)

Includes shares of Class A Common Stock, if any, that may be sold pursuant to the underwriters' over-allotment option.

(2)

Estimated solely for the purposes of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933.

(3)

$19,670.18 has been previously paid. $1,157.07 is being paid herewith.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated July 6, 2004.

7,941,177 Shares

Bucyrus International, Inc.

Class A Common Stock

        This is an initial public offering of shares of Class A common stock of Bucyrus International, Inc. All of the 7,941,177 shares of Class A common stock are being sold by Bucyrus.

        Bucyrus is currently majority-owned by a subsidiary of American Industrial Partners Capital Fund II, L.P., or the Fund. The Fund is controlled by American Industrial Partners, or AIP. Upon completion of this offering, AIP/BI LLC, or AIP/BI, a newly-formed subsidiary of AIP, will directly own the Fund's interest in Bucyrus, in the form of 100% of Bucyrus' 11,442,400 shares of outstanding Class B common stock. Each share of Class A common stock has one vote and each share of Class B common stock has two votes. Accordingly, following this offering, AIP will indirectly own common stock representing 72.8% of the total voting power of Bucyrus' common stock.

        Prior to this offering, there has been no public market for the Class A common stock. It is currently estimated that the initial public offering price per share will be between $16.00 and $18.00. Bucyrus has applied for quotation of the Class A common stock on the Nasdaq National Market under the symbol "BUCY."

See "Risk Factors" on page 11 to read about factors you should consider before buying shares of the Class A common stock.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

	Per Share	Total
Initial public offering price	$	$
Underwriting discount	$	$
Proceeds, before expenses, to Bucyrus	$	$

        To the extent that the underwriters sell more than 7,941,177 shares of Class A common stock, the underwriters have the option to purchase up to 1,191,176 shares of Class B common stock from AIP/BI at the initial public offering price less the underwriting discount. Class B shares will automatically convert into Class A shares upon sale by AIP/BI. Bucyrus will not receive any of the proceeds from any sale of shares sold by AIP/BI.

        The underwriters expect to deliver the shares of Class A common stock against payment in New York, New York on                  , 2004.

Goldman, Sachs & Co.

Lehman Brothers Legg Mason Wood Walker
                   Incorporated

Prospectus dated             , 2004.

Front:

        [Artwork depicting a dragline, shovel and blasthole drill.]

SOURCES OF MARKET AND INDUSTRY DATA

        This prospectus includes market share and industry data and forecasts that we have obtained from internal company surveys, market research, consultant surveys, publicly available information and industry publications and surveys. Information regarding historical equipment sales, industry surveys of equipment installation and industry aftermarket purchasing and sales information are derived primarily from databases maintained by the Parker Bay Company, which specializes in providing market research for the mining and earthmoving equipment industries. Third-party surveys, publications, consultant surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy and completeness of such information. We have not independently verified any of the data from third-party sources nor have we ascertained the underlying economic assumptions relied upon therein. Similarly, internal company surveys and reports, industry forecasts and market research, which we believe to be reliable based upon management's knowledge of the industry, have not been verified by any independent sources. In addition, we do not know what assumptions regarding general worldwide or country-specific economic growth were used in preparing the forecasts cited in this prospectus. Except where otherwise noted, statements as to our position relative to our competitors or as to market share refer to the most recent available data.

ii

PROSPECTUS SUMMARY

This summary highlights only selected information contained elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our Class A common stock. You should read this entire prospectus carefully, including "Risk Factors," "Forward-Looking Statements" and the consolidated financial statements and notes to those consolidated financial statements beginning on page F-1 before investing in our Class A common stock. In this prospectus, unless the context indicates otherwise, "we," "us," "our," "Bucyrus" and the "Company" and similar terms refer to Bucyrus International, Inc. and its consolidated subsidiaries.

Our Company

        We design, manufacture and market draglines, electric mining shovels and rotary blasthole drills used for surface mining and provide the aftermarket replacement parts and service for these machines. There are only two global manufacturers of this large excavation machinery and we believe we have the largest installed base of this equipment in the world and the leading market share in draglines and large rotary blasthole drills. Our products are sold to customers throughout the world in every market where surface mining is conducted with modern methods. Through our predecessor companies, we have been producing excavation machines since 1880 and we have a widely-recognized brand name. Our machines dug the Panama Canal.

        Surface mining is safer, has lower extraction costs and is growing faster than underground mining. Growth is driven by increased demand for surface mined commodities such as copper (South America), oil sands (Canada) and coal (Australia, South Africa, the Western United States, and increasingly, China and India). We have established a leading position in these important surface mining regions. We believe that coal surface mining in China and India holds significant potential for long-term growth, and in early 2004, we entered into a $57 million contract for a dragline sale to the China market. We believe that the sale of this dragline, the first of its kind sold into China, marks a new trend towards the adoption of technologically advanced surface mining methods in China.

        We sell both original equipment manufactured, or OEM, and aftermarket parts and service. OEM machine sales are closely correlated with the strength of commodity markets and maintain and augment our almost $10 billion (calculated by estimated replacement value) installed base, which provides the foundation for our aftermarket activities. Our aftermarket parts and service operations, which are more stable and more profitable than our OEM sales, accounted for approximately 70% of sales over the last ten years. Over that period and throughout commodities cycles, our aftermarket sales have sustained a compound annual growth rate of almost 7%, increasing every year except for one year (1999) in which sales declined 2%. We have a broad and established global presence with a network of 26 sales and service offices located in all countries with major surface mining operations. We manufacture our OEM machines and the majority of aftermarket parts in our facility in South Milwaukee, Wisconsin.

        We concentrate on producing technologically advanced and productive machines that allow our customers to conduct cost-efficient operations. We are the only surface mining manufacturer of alternating current, or AC, drive draglines and electric mining shovels, which we believe have higher efficiency rates and consume less power than direct current, or DC, powered machines. We also offer advanced computer control systems which allow technicians at our headquarters to remotely monitor and adjust our machines all around the world via the Internet.

1

        The following is a summary of our OEM products:

Product	Primary Use	Price Range	Average Life
Draglines	Remove overburden	$10-70 million	40 years
Electric Mining Shovels	Load materials into trucks	$2-15 million	15 years
Rotary Blasthole Drills	Drill holes for explosives	$0.6-3 million	15 years

        The following charts provide a breakdown of our sales by commodity, region and product line:

Percentage of OEM Sales by Commodity(1)	Percentage of Total Sales by Region(1)	Percentage of Total Sales by Product Line(2)

(1)

Year ended December 31, 2003.

(2)

Ten years ended December 31, 2003.

Our Industry

        The equipment we manufacture and service is primarily used to mine copper, coal, oil sands and iron ore. Growth in demand for these commodities is a function of, among other things, economic activity, population increases and continuing improvements in standards of living in many areas of the world. While our aftermarket parts and service sales have grown consistently, mine operators tend to purchase OEM equipment when they anticipate sustained strength in the commodities markets. Prices for copper, coal, oil and iron ore have risen in recent months. For example, as of May 31, 2004, the price of copper was quoted at $1.28/lb, a 68% increase over the prior year price of $0.76/lb. Factors that could support sustained demand for these key commodities include continued economic growth in China, India and the developing world and renewed economic strength in industrialized countries.

Our Strengths

        Market Leader in Most Attractive Markets.    We are the only global excavation machinery manufacturer that exclusively focuses on surface mining. Surface mining is primarily employed in, and we have a leadership position in, the regions with the lowest mineral extraction cost and rapid economic development.

        Advanced Technology.    We produce the most advanced surface mining machines available, providing innovative, cost efficient technology and a high degree of reliability to lower customers' operating costs. We are the only surface mining manufacturer of AC powered machines and we offer advanced computer control systems.

        Largest Installed Base.    The estimated replacement value of our worldwide installed base is almost $10 billion, which we believe is the largest installed base of surface mining equipment. This is the foundation for our high margin, predictable and growing aftermarket parts and service business.

2

        Significant Backlog and Aftermarket Sales Generate Predictable Cash Flows.    Long manufacturing lead times, long-term maintenance contracts and consistent aftermarket sales provide a high degree of predictability on future sales and cash flows. Backlog at May 31, 2004 increased to $284.3 million from $233.6 million at December 31, 2003, a 22% increase.

        Strong Management Team.    Since our current management team, which has an average of 22 years of experience in the industry, was formed in 2000, they have successfully improved product performance, grown sales and market share and improved our cost structure during a period of prolonged weakness in commodity prices and OEM sales. Our senior management will own approximately 3% of our common stock outstanding after this offering and will have options to purchase 688,800 additional shares of Class A common stock.

Our Strategy

        Capture Aftermarket Parts and Service Opportunity.    We believe that we currently capture less than half of the total annual aftermarket sales generated by our installed base. We are pursuing several performance and technology-based strategies to capture an increased share of this profitable opportunity.

        Focus on Growth in Emerging Market Opportunities.    As new opportunities emerge in various mining markets across the world, we focus on being the first to establish ourselves as the main surface mining equipment supplier in these new markets.

        Focus on Providing the Most Innovative and Reliable Products.    We will continue to provide reliable and technologically innovative machines to lower customers' operating costs and improve operating efficiency. We have a long-standing strategic partnership with a United States subsidiary of Siemens A.G., or Siemens, and have approximately 100 engineers engaged in product design and technical support.

        Expand Margins Through Continuous Cost Discipline and Technological Innovation.    Since 2000, our management team has successfully reduced our cost structure and materially increased operating margins. We have also positioned ourselves so that our operating results will benefit from the increased OEM sales we expect to occur in a strong commodities market.

Risks Relating to Our Business and this Offering

        As part of your evaluation of an investment in our Class A common stock, you should take into account the risks to which we are subject. We may be adversely affected by risks related to our business, including, among other things, risks related to key supplier and customer relationships, leverage and to conducting business in foreign countries and foreign currencies. Our industry is highly competitive and subject to cyclical fluctuations and regulatory risks. You should also be aware that there are various risks specific to our Class A common stock, including risks related to, among other things, continuing voting control by our majority stockholder, future potential sales of substantial amounts of our common stock, potential stock price volatility and book value dilution. For more information about these and other risks, see "Risk Factors" beginning on page 11. You should consider carefully these risks before making an investment in our Class A common stock.

American Industrial Partners

        AIP, through its indirect ownership of 100% of our Class B common stock, will continue to control a majority of the voting power of our common stock after the completion of this offering. AIP is a private investment fund headquartered in San Francisco and New York that has managed over $1 billion of equity capital since its inception in 1988 and has invested in approximately 20 companies. AIP seeks to invest in leading industrial businesses that meet criteria with respect to competitive position and proprietary capability. AIP made its initial investment in Bucyrus in 1997.

        Bucyrus International, Inc. was incorporated in Delaware in 1927 as the successor to a business which commenced in 1880. Our principal executive offices are located at P.O. Box 500, 1100 Milwaukee Ave., South Milwaukee, Wisconsin 53172. Our telephone number is (414) 768-4000. Our Internet address is www.bucyrus.com. The contents of our website are not part of this prospectus.

3

The Offering

Class A common stock offered		7,941,177 shares.
Over-allotment option		1,191,176 shares. Any shares purchased through the underwriters' exercise of the over-allotment option will be shares of Class B common stock held by AIP/BI, LLC, a newly formed subsidiary of AIP, which we refer to as AIP/BI. The Class B shares will convert automatically into Class A shares upon their sale by AIP/BI to the underwriters. We will not receive any proceeds from sales of common stock by AIP/BI.
Description of common stock		Our common equity will consist of two classes of common stock: Class A common stock and Class B common stock. Only Class A common stock is being offered in this offering. Class A and Class B common stock will be identical in all material respects, except with respect to voting rights. Holders of Class A common stock are entitled to one vote per share, and holders of Class B common stock are entitled to two votes per share, on all matters to be voted on by our common stockholders.
		Shares of Class B common stock may only be held by a subsidiary or affiliate of AIP/BI. Upon the sale or transfer of a share of Class B common stock to a person or entity that is not a subsidiary or affiliate of AIP/BI, the share will convert automatically into one share of Class A common stock. A holder of Class B common stock may at any time, at its option, convert any or all of the shares of Class B common stock it holds into an equal number of shares of Class A common stock.
Common stock to be outstanding after this offering:
	Class A	8,557,177 shares (does not include 802,400 shares subject to options, 573,600 of which are at a strike price of $0.125 per share and 228,800 of which are at a strike price of $12.50 per share).
	Class B	11,442,400 shares.
Common stock to be indirectly held by AIP immediately after this offering:
	Class A	None.
	Class B	11,442,400 shares (100% of total Class B common stock outstanding, 57.2% of total common stock outstanding and 72.8% of total voting power of common stock).

4

Use of proceeds	We intend to use the net proceeds from this offering, together with borrowings under our new senior secured credit facility, to (i) retire our $150 million 9-3/4% Senior Notes due 2007, or the Senior Notes; (ii) pay deferred interest due on the Senior Notes held by Bucyrus Holdings, LLC, or Holdings; (iii) satisfy our obligations to pay all amounts owed to AIP under a management services agreement (to be terminated prior to the completion of this offering), which we refer to as the Management Services Agreement; and (iv) repay indebtedness under and terminate our existing senior secured credit facility. We will retain any remaining proceeds for general corporate purposes.
Dividend policy	We intend to pay cash dividends on our Class A and Class B common stock at an initial quarterly rate of $0.0575 per share (equal to $0.23 per year). The declaration and payment of future dividends to holders of our common stock will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, earnings, the terms of our new senior secured credit facility, legal requirements and other factors as our board of directors deems relevant.
Proposed Nasdaq National Market symbol	We have applied for quotation of our Class A common stock on the Nasdaq National Market under the symbol "BUCY."
Risk factors	See "Risk Factors" and other information included in this prospectus for a discussion of factors that you should carefully consider before investing in our Class A common stock.
Required refinancing	This offering is part of a comprehensive refinancing of our capital structure. In connection with this offering of Class A common stock, we will be entering into a new senior secured credit facility which we expect will provide us with a senior secured term loan of $100 million and a senior secured revolving credit facility of up to $50 million. We will also retire the Senior Notes and repay and terminate our existing senior secured credit facility. The underwriters' agreement to purchase the shares of Class A common stock in this offering will be conditioned upon our entry into the new senior secured credit facility.

        Unless we specifically state otherwise, all information in this prospectus assumes that the underwriters do not exercise their over-allotment option. If the underwriters exercise their over-allotment option in full, 9,748,353 shares of Class A common stock and 10,251,224 shares of Class B common stock will be outstanding after this offering.

5

Recapitalization and Corporate Reorganization

        Our equity capitalization currently consists of shares of a single class of common stock. Upon the completion of this offering, our equity capitalization will consist of authorized and outstanding shares of Class A common stock and Class B common stock and authorized shares of preferred stock. Only Class A common stock is being offered in this offering.

        Currently, Holdings owns approximately 95% of our common equity. Holdings also beneficially owns $75.6 million aggregate principal amount of our 9-³/4% Senior Notes due 2007, or the Senior Notes, together with the right to receive approximately $23.7 million of deferred interest payable on those notes.

        Immediately prior to the closing of this offering, the following transactions will occur to effect the dissolution of Holdings and the reorganization and distribution of its assets. These transactions are integral to the reorganization of our ownership structure in connection with this offering, but will not have a material effect on our operations.

•

Holdings will contribute to us its Senior Notes and all of its common stock in us. We will cancel the Senior Notes and common stock and issue to Holdings a new promissory note with terms substantially identical to the canceled Senior Notes and 11,442,400 shares of Class B common stock.



•

Holdings will be dissolved. Upon Holdings' dissolution, the new promissory note and all of the shares of Class B common stock issued to Holdings will be distributed to the Fund. The promissory note will be retired as part of our retirement of all of the Senior Notes as described under "Use of Proceeds" below. The Fund will form AIP/BI and contribute to AIP/BI all of the shares of Class B common stock.



•

Holdings will contribute to our Minserco subsidiary (i) all of its rights and obligations under a dragline lease agreement between BCC Equipment Leasing and Holdings and (ii) all of its obligations to operate the dragline under a limestone extraction agreement among Bahama Rock Ltd., Martin Marietta Materials, Inc. and Holdings. In connection with Holdings' contribution, we will guarantee Minserco's obligations under the dragline lease and the limestone extraction agreement. See "Certain Relationships and Related Transactions".

        In addition, immediately prior to the closing of this offering we will cancel all of our outstanding common equity and issue shares of Class A common stock to all holders of our common shares other than Holdings. Holdings' shares of common stock will be exchanged for shares of newly authorized Class B common stock as part of the reorganization noted above. Options to purchase our common stock will convert into options to purchase shares of our Class A common stock.

6

Ownership Structure

        The following organizational charts set forth our current ownership structure and our pro forma ownership structure giving effect to this offering, the recapitalization and the corporate reorganization.

Current

Pro Forma

Ownership

        The following table reflects our pro forma ownership taking into account this offering, the recapitalization and the corporate reorganization.

	Assuming No Exercise of Over-allotment Option		Assuming Exercise of Over-allotment Option
	% of Voting Power	% of Total Outstanding Number of Class A and Class B Common Stock	% of Voting Power	% of Total Outstanding Number of Class A and Class B Common Stock
AIP/BI LLC	72.8	57.2	67.8	51.3
New public investors and other holders	27.2	42.8	32.2	48.7

7

Summary Consolidated Financial Data

        The following table sets forth summary consolidated financial data for our operations (1) as of and for the three fiscal years ended December 31, 2003 and the three months ended March 31, 2003 and 2004 and as of March 31, 2004 and (2) for the year ended December 31, 2003 and the three months ended March 31, 2003 and 2004 and as of March 31, 2004 on an as adjusted basis. We derived the selected financial information for each of the three years ended December 31, 2001, 2002 and 2003 from our audited consolidated financial statements and the related notes included elsewhere in this prospectus. We derived the selected financial information for the three months ended March 31, 2003 and 2004 from our unaudited consolidated financial statements and the related notes included elsewhere in this prospectus. The as adjusted statements of operations data give effect to this offering and our borrowings under a new senior secured credit facility along with the application of net proceeds thereof and the termination of the Management Services Agreement prior to this offering as if they occurred as of January 1, 2003. The as adjusted balance sheet data give effect to this offering and our borrowings from our new senior secured credit facility of $102.1 million as of March 31, 2004. You should read this summary historical financial information together with the consolidated financial statements and accompanying notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

			For the years ended December 31,											For the three months ended March 31,
												As Adjusted								As Adjusted
Dollars in thousands, except per share data
			2001			2002			2003			2003(1)		2003			2004			2003(1)		2004(1)
Consolidated Statements of Operations Data:
Sales			$	290,576		$	289,598		$	337,695		$	337,695	$	60,882		$	97,128		$	60,882	$	97,128
Cost of products sold				243,791			233,516			268,162			268,162		46,324			77,471			46,324		77,471
	Gross profit			46,785			56,082			69,533			69,533		14,558			19,657			14,558		19,657
Selling, general and administrative expenses				30,806			32,214			42,747			39,562		8,791			14,056			8,381		13,556
Research and development expenses				5,900			6,512			4,594			4,594		1,154			1,354			1,154		1,354
Amortization of intangible assets				4,292			1,647			1,647			1,647		412			412			412		412
	Operating earnings			5,787			15,709			20,545			23,730		4,201			3,835			4,611		4,335
Interest expense				20,885			18,672			17,687			6,052		4,523			4,125			1,546		1,184
Other (income) expense—net				(8,045	)		2,776			856			668		204			345			212		187
Earnings (loss) before income taxes				(7,053	)		(5,739	)		2,002			17,010		(526	)		(635	)		2,853		2,964
Income tax expense				3,410			5,047			5,583			5,883		806			1,380			874		1,452
Net earnings (loss)			$	(10,463	)	$	(10,786	)	$	(3,581	)	$	11,127	$	(1,332	)	$	(2,015	)	$	1,979	$	1,512
Basic and diluted net earnings (loss) per share data:
	Net earnings (loss) per share:
		Basic	$	(.91	)	$	(.94	)	$	(.31	)	$	.57	$	(.12	)	$	(.17	)	$	.10	$	.08
		Diluted	$	(.91	)	$	(.94	)	$	(.31	)	$	.54	$	(.12	)	$	(.17	)	$	.10	$	.07
	Weighted average shares:
		Basic		11,484,800			11,484,800			11,710,312			19,651,486		11,484,800			12,058,400			19,425,977		19,999,577
		Diluted		11,484,800			11,484,800			11,710,312			20,684,318		11,484,800			12,058,400			20,683,529		20,686,595
Other Financial Data:
EBITDA(2)			$	30,234		$	28,104		$	33,086				$	7,309		$	7,008
AIP management fee and expenses(3)				1,587			1,610			3,185					410			500
Non-cash stock compensation expense(4)				—			—			1,792					—			4,148
Restructuring charges (severance)				899			1,308			571					127			54
Gain on sale of shares received in demutualization of The Principal Financial Group				(8,704	)		—			—					—			—
Loss on sale of fixed assets				750			655			626					57			8

8

										For the three months ended March 31,
	For the years ended December 31,
Dollars in thousands
	2001			2002			2003			2003			2004
Consolidated Statements of Cash Flows Data:
Cash provided by (used in) operating activities	$	(1,309	)	$	9,705		$	22,938		$	(78	)	$	1,455
Cash provided by (used in) investing activities		2,107			3,816			(3,303	)		(302	)		(701	)
Cash provided by (used in) financing activities		(92	)		(16,803	)		(18,990	)		1,279			(2,404	)

								As of March 31,
	As of December 31,
Dollars in thousands										As Adjusted 2004(1)
	2001		2002			2003		2004
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	7,218	$	4,189		$	6,075	$	4,450	$	4,450
Property, plant and equipment—net		77,203		62,479			57,433		55,210		55,210
Total assets		355,745		346,878			362,143		349,800		351,833
Total debt		223,486		208,730			191,769		189,530		106,570
Long-term liabilities, including long-term debt		282,302		283,574			231,689		229,721		145,396
Total liabilities		338,573		355,009			352,420		338,939		225,239
Common shareholders' investment (deficit)		17,172		(8,131	)		9,723		10,861		126,594

(1)

See "Unaudited As Adjusted Financial Data"

(2)

EBITDA is defined as earnings (loss) before interest, income taxes, depreciation and amortization. EBITDA, a measure used by management to measure liquidity and performance, is reconciled to net loss and net cash provided by (used in) operating activities in the following table. Our management believes EBITDA is useful to the investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is not a recognized term under generally accepted accounting principles, or GAAP, and does not purport to be an alternative to net earnings (loss) as an indicator of operating performance or to net cash provided by (used in) operating activities as a measure of liquidity. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies. Additionally, EBITDA is not intended to be a measure of free cash flow for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. The amounts shown for EBITDA as presented herein differ from the amounts calculated under the definition of EBITDA used in our debt instruments. The definition of EBITDA used in our debt instruments is further adjusted for certain cash and non-cash charges and is used to determine compliance with financial covenants and our ability to engage in certain activities such as incurring additional debt and making certain payments.

9

The following is a reconciliation of net loss as shown in the Consolidated Statements of Operations to EBITDA and a reconciliation of EBITDA to net cash provided by (used in) operating activities as shown in the Consolidated Statements of Cash Flows:

										For the three months ended March 31,
	For the years ended December 31,
Dollars in thousands
	2001			2002			2003			2003			2004
Net loss	$	(10,463	)	$	(10,786	)	$	(3,581	)	$	(1,332	)	$	(2,015	)
Interest income		(252	)		(243	)		(322	)		(27	)		(65	)
Interest expense		20,885			18,672			17,687			4,523			4,125
Income taxes		3,410			5,047			5,583			806			1,380
Depreciation		11,240			10,666			10,831			2,672			2,761
Amortization(a)		5,414			4,748			2,888			667			822
EBITDA		30,234			28,104			33,086			7,309			7,008
Changes in assets and liabilities		454			4,422			10,382			(2,142	)		(4,269	)
Non-cash stock compensation expense		—			—			1,792			—			4,148
Loss on sale of fixed assets		750			655			626			57			8
Gain on sale of the shares received in demutualization of The Principal Financial Group		(8,704	)		—			—			—			—
Interest income		252			243			322			27			65
Interest expense		(20,885	)		(18,672	)		(17,687	)		(4,523	)		(4,125	)
Income tax expense		(3,410	)		(5,047	)		(5,583	)		(806	)		(1,380	)
Net cash provided by (used in) operating activities	$	(1,309	)	$	9,705		$	22,938		$	(78	)	$	1,455

(a)

Includes amortization of intangible assets and debt issuance costs.

(3)

Excludes fees paid to AIP or its affiliates and advisors for services performed for us outside the scope of the Management Services Agreement for the years ended December 31, 2001, 2002 and 2003 and for the three months ended March 31, 2003 and 2004 of $285,000, $184,000, $285,000, $45,000 and $44,000, respectively. Upon the completion of this offering, we will not have any continuing arrangements with AIP or its affiliates, other than as disclosed under "Certain Relationships and Related Transactions."

(4)

Non-cash stock compensation expense represents the charge recorded relating to our existing book value stock option plan. Non-cash stock compensation expense will continue to be recorded until the completion of this offering. No further compensation expense will be recorded related to this plan in periods subsequent to the period in which this offering occurs. See Unaudited As Adjusted Financial Data.

10

RISK FACTORS

Before investing in our Class A common stock, you should carefully consider the risks described below and all other information contained in this prospectus, including the consolidated financial statements and accompanying notes. Our business, prospects, financial condition, results of operations and cash flows could be materially and adversely affected by the following risks, or other risks and uncertainties that we have not yet identified or that we currently consider to be immaterial. In that event, the trading price of our Class A common stock could decline, and you could lose part or all of your investment.

Risks Related to our Business

A material disruption to our manufacturing plant in Wisconsin could adversely affect our ability to generate revenue

        We produce most of our equipment and aftermarket parts at our manufacturing plant in South Milwaukee, Wisconsin. If operations at this facility were to be disrupted as a result of equipment failures, natural disasters, work stoppages, power outages or other reasons, our business and results of operations could be adversely affected. Interruptions in production would increase costs and reduce sales. Our facilities are also subject to the risk of catastrophic loss due to fires, explosions or adverse weather conditions. Any interruption in production capability could require us to make large capital expenditures to remedy the situation, which could negatively affect our profitability and cash flows. We maintain property damage insurance which we believe to be adequate to provide for reconstruction of our facilities and equipment, as well as business interruption insurance to mitigate losses resulting from any production interruption or shutdown caused by an insured loss. However, any recovery under this insurance policy may not offset the lost sales or increased costs that may be experienced during the disruption of operations. Lost sales may not be recoverable under the policy and longer-term business disruptions could result in a loss of customers. If this were to occur, future sales levels, and therefore profitability, could be adversely affected.

If we are unable to purchase component parts or raw materials from key suppliers, or the prices of component parts or raw materials rise prohibitively, our business and results of operations may be materially adversely affected

        We purchase all of our AC drives and certain other electrical parts from Siemens. The loss of Siemens, our only sole source supplier, could have a material adverse effect on our business. We also purchase track links, castings and forgings from suppliers with whom we have long-standing relationships. Although these are not sole source suppliers, the loss of these suppliers could affect our ability to maintain or lower costs. If we had to develop alternative sources of supply, the ability to supply parts to our customers when needed could be impaired, business could be lost and margins could be reduced. In addition, we use substantial quantities of wide-plate steel in our production processes. There have been significant recent increases in steel prices. If we are unable to recover price increases for raw materials we will experience reduced margins. Any significant future delays in obtaining production inputs and other supplies could harm our business and results of operations.

Leverage could affect our operating results and restrict management's discretion

        At March 31, 2004, our consolidated debt totaled approximately $189.5 million. As of March 31, 2004, on an as adjusted basis reflecting the application of the proceeds to us from this offering and our anticipated entry into a new senior secured credit facility, we would have had approximately $106.6 million of total debt. In addition, we would have had approximately $30 million of availability under the revolving portion of the new senior secured credit facility. Our existing credit facility

11

permits, and we anticipate that our new senior secured credit facility will permit us to borrow additional amounts from other sources, subject to specified restrictions on incurrence of indebtedness. Although we believe that our future operating cash flow, together with available financing arrangements, will be sufficient to fund our operating and capital expenditure requirements, leverage and debt service obligations could have important consequences, including the following:

•

The terms of our existing debt obligations contain, and our new senior secured credit facility will contain, numerous financial and other restrictive covenants which, among other things, limit our ability to pay dividends, incur additional debt and sell assets. If we do not comply with these obligations, we could be in default under the applicable agreement, which, if not cured or waived, could require repayment of the indebtedness immediately.



•

We may be vulnerable in the event of downturns in business, in our industry or in the economy generally.



•

We may have difficulty obtaining additional financing at favorable interest rates to meet requirements for working capital, capital expenditures, acquisitions or general corporate purposes.



•

We are required to dedicate a substantial portion of our cash flow to the payment of principal and interest on our debt, which reduces funds available for maintaining and growing operations.



•

Our variable interest rate borrowings leave us vulnerable to increases in interest rates.



•

Our principal borrowings are denominated in United States dollars, and we must convert the portion of our earnings denominated in foreign currencies into United States dollars in order to service debt, which exposes us to risks associated with currency fluctuations.

We are reliant on significant customers

        Our business is dependent on securing and maintaining customers by promptly delivering reliable, high-performance products. We do not consider ourselves to be dependent upon any single customer; however, on an annual basis a single customer may account for a large percentage of sales, particularly OEM machine sales. In 2001, 2002 and 2003, BHP Billiton, our single largest customer, accounted for approximately 11%, 12% and 17%, respectively, of our sales. The products that we may sell to any particular customer depend on the size of that customer's capital expenditure budget devoted to surface mining plans in a particular year and on the results of competitive bids for major projects. Additionally, our top five customers in each of 2001, 2002 and 2003 collectively accounted for approximately 30%, 41% and 43%, respectively, of our sales. The trend reflects the recent consolidation of the mining industry. In addition, key sectors of the surface mining industry are dominated by a few enterprises, some of whom are our customers. For example, mining in the Canadian oil sands region is a capital intensive endeavor in which key market participants include the Syncrude Canada Ltd. joint venture and Suncor Energy and other companies and joint ventures. While we are not dependent on any one customer, the loss of one or more of our significant customers could, at least on a short-term basis, have an adverse effect on results of operations.

Labor disruptions could adversely affect operations

        As of March 31, 2004, 287 of the 588 employees at our South Milwaukee facility were represented by the United Steelworkers of America Union. The four-year contract with the union representing workers at that facility and the three-year contract with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America representing workers at our Memphis, Tennessee warehouse facility expire in April, 2005 and September, 2005, respectively.

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Although we believe that our relations with employees are good, a dispute between us and our employees could disrupt our operations. Certain of our mine site operations and production and other facilities are located in areas of high union concentration or in nations with laws favorable to unionization, and, as a result, such operations and facilities are susceptible to union-organizing activity. In addition, the workforces of many of our suppliers and our transportation providers are unionized. If they are disrupted by labor issues, delivery of parts and materials to us could be reduced or delayed. Many of our customers have unionized work forces, and work stoppages experienced by our customers could cause us to lose sales or incur increased costs.

We may be adversely affected by environmental and safety regulations or concerns

        We are subject to environmental and occupational safety and health laws and regulations in the United States and other countries. Environmental requirements are complex, change frequently and have tended to become more stringent over time. We cannot assure our complete historical or future compliance with all of these requirements. We may also incur material costs and liabilities in connection with these requirements in excess of amounts reserved. In addition, increased environmental regulation of the mining industry in North America and overseas could increase costs to us or to our customers and adversely affect the sales of our products and future operating earnings. These requirements may change in the future in a manner that could have a material adverse effect on our business, results of operations and financial condition. We have made and will continue to make capital and other expenditures to comply with environmental requirements. For more information about these matters, see "Business—Environmental and Related Matters," "Business—Legal Proceedings" and "Business—Regulations Affecting our Customer Base."

We must attract and retain skilled labor in order to maintain and grow our business

        Our ability to operate profitably and expand our operations depends in part on our ability to attract and retain skilled manufacturing workers, equipment operators, engineers and other technical personnel. Demand for these workers is currently high and the supply is limited, particularly in the case of skilled and experienced engineers and machinists. As a result, our growth may be limited by the scarcity of skilled labor. Even if we are able to attract and retain employees, competition for them may increase total compensation costs. Additionally, a significant increase in the wages paid by competing employers could result in a reduction in our skilled labor force, increases in the rates of wages we must pay or both. If compensation costs increase or we cannot attract and retain skilled labor, operating earnings would be reduced and production capacity and growth potential would be impaired.

We are subject to risks of doing business in foreign countries, including emerging markets

        We derive the majority of our sales from foreign markets where we have substantial operations. During 2003, we generated $260.4 million or approximately 77%, of our sales outside the United States. A significant portion of this business is conducted in emerging markets located in Asia, Africa and South America.

        Changes in political, regulatory or economic conditions have the potential to adversely affect our international operations and our financial results. These factors principally include:

•

trade protection measures and price controls;



•

trade sanctions and embargos;



•

import or export licensing requirements;



•

economic downturns, civil disturbances or political instability;



•

nationalization and expropriation; and



•

potentially burdensome taxation.

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        In addition, many of the nations in which we operate have developing legal and economic systems, adding a level of uncertainty to our operations in those countries relative to those that would be expected domestically.

        The above factors, and related unpredictability, could place the value of our operations and business relationships in overseas markets at risk.

We are subject to risks related to conducting business in foreign currencies

        Our Australian, Canadian, South African, Brazilian, Chilean and British aftermarket parts sales are denominated in the currencies of those nations, and the majority of our service sales are denominated in these and other local currencies. Although a portion of the expenses of providing overseas services are denominated in local currencies, the cost of goods associated with overseas sales are generally incurred in United States dollars. As a result, an increase in the value of the United States dollar relative to these nations' currencies would decrease the United States dollar equivalent of aftermarket sales earned abroad without decreasing the United States dollar value of a portion of the expenses associated with overseas sales. We do not hedge currency exposures related to our aftermarket business, which is naturally hedged only in part through the incurrence of part of the associated labor, operating expenses and ancillary costs in local currencies.

        Currency controls, devaluations, trade restrictions and other disruptions in currency convertibility and in the market for currency exchange could limit our ability to convert revenues earned abroad into United States dollars in a timely way. This could adversely affect our ability to service our United States dollar indebtedness, fund our United States dollar costs, finance capital expenditures and pay dividends on our common stock.

The loss of key executives or other key personnel could adversely affect our business

        Our success substantially depends upon our ability to attract and retain qualified employees and upon the ability of senior management and other key employees to implement our business strategy and maintain and grow customer and supplier relationships. We believe there are only a limited number of available qualified executives in our industry. Although we are not aware of any planned departures, we rely substantially upon the services of Timothy W. Sullivan and Thomas B. Phillips. The loss of their services or the services of other members of our management team or the inability to attract and retain other talented personnel could impede the further implementation of our business strategy, which could have a material adverse effect on our business. We do not currently maintain key man life insurance policies for any of our employees. In addition, competition for qualified employees among companies that rely heavily on engineering and technology is intense, and the loss of qualified employees or an inability to attract, retain and motivate additional highly skilled employees required for the operation and expansion of our business could have a materially adverse affect our business.

We may have to apply significant cash to meet our unfunded pension obligations, and these obligations are subject to increase

        Substantially all of our United States employees participate in our defined-benefit pension plan. As a result of declines in pension asset values, different actuarial assumptions and the application of purchase accounting, our pension expenses have increased. At December 31, 2003, our unfunded pension liability totaled approximately $30 million. Continued declines in interest rates or the market values of the securities held by the plans, or other adverse changes, could materially increase the underfunded status of our plans and affect the level and timing of required cash contributions in 2004 and after.

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Our technological capability is dependent in part on our continued alliance with Siemens

        We have a long-standing relationship with Siemens to co-develop advanced technology for our machines. The technology co-developed with Siemens is a key factor in our ability to compete effectively in the surface mining industry based on the technological capabilities of our machines. We depend on Siemens' continued ability to assist in the development of technologically advanced components and systems. We have an exclusive contractual relationship with Siemens that expires in 2006. We believe that our relationship with Siemens is mutually beneficial, but we cannot be certain that our contractual relationship will continue beyond 2006. If the relationship with Siemens were to be discontinued and we could not engage a comparable R&D partner and supplier, our ability to compete based upon technological innovation would be adversely affected.

Our continued success depends in part on the ability to protect intellectual property

        Our future success depends in part upon the ability to protect intellectual property. We rely principally on nondisclosure agreements and other contractual arrangements and trade secret law and, to a lesser extent, trademark and patent law, to protect our intellectual property, including jointly developed intellectual property. However, these measures could prove inadequate to protect intellectual property from infringement by others or to prevent misappropriation of our proprietary rights. In addition, the laws and enforcement mechanisms of some foreign countries do not protect proprietary rights to the same extent as do United States laws. Our inability to protect our proprietary information and enforce intellectual property rights through infringement or other enforcement proceedings could have a material adverse effect on our business, financial condition and results of operations.

We are, and may be in the future, subject to product liability and other suits related to past and current activities

        The sale and servicing of complex, large-scale machinery used in a variety of locations and climates, and integrating a variety of manufactured and purchased components entails an inherent risk of suit and liability relating to the operation and performance of the machinery and the health and safety of the workers who operate and come into contact with the machinery. We maintain product liability and other insurance to cover claims of this nature. Our policies, however, are subject to deductibles and recovery limitations as well as limitations on contingencies covered. Suits against us could be resolved in a manner that materially and adversely affects our financial condition, and we could be subject to future material product liability or other tort or contractual suits.

We have been named as a defendant in multiple suits asserting claims related to exposure to asbestos and other substances

        We have been named as a co-defendant as of May 31, 2004, in 292 pending personal injury cases in nine states involving 1,480 plaintiffs alleging damages caused by exposure to asbestos and other substances. We have secured the dismissal and resolution of a number of previous claims alleging similar fact patterns. The particular circumstances of many of these cases are difficult to assess because the claims allege exposure to a variety of substances from various sources over varying historical periods and assert the culpability of multiple defendants. We have insurance coverage, subject to various deductible and other coverage limitations, for the historical periods during which the pending claims of which we are aware allege exposure. It is possible that claims could be brought with respect to subsequent periods or that insurance coverage in respect of periods for which coverage was obtained will not be adequate to satisfy adverse judgments and other claim resolutions. If these suits are resolved in an adverse manner our financial position could be adversely affected. In addition, we could be named as a defendant in future suits alleging damages due to exposure to asbestos and other substances.

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Risks Relating to our Industry

We operate in a highly competitive industry

        We operate in a highly competitive industry. In the aftermarket, we compete with numerous will-fitters. Our only global competitor in electric mining shovels and draglines and primary competitor in rotary blasthole drills is the P&H division of Joy Global, Inc., although for certain applications our electric mining shovels may also compete against hydraulic shovels made by other manufacturers. Certain of our competitors may be larger, have greater financial resources and may be less leveraged than us. In China and Russia, we also face some limited competition from regional and domestic equipment manufacturers. Methods of competition are diverse and include price, lead times, operating costs, product productivity, design and performance, reliability, service, delivery and other commercial factors. If we cannot compete effectively with existing or future competitors, our operating results could be materially adversely affected.

The industries we serve are subject to significant cyclical fluctuations

        Because our customers' purchasing patterns are affected by a variety of factors beyond our control, our sales and operating results may fluctuate significantly from period to period. Given the large sales price of our machinery, one or a limited number of machines may account for a substantial portion of sales in any particular period. Although we recognize sales on a percentage-of-completion basis for new machines, the timing of one or a small number of contracts in any particular period may nevertheless affect operating results. In addition, sales and gross profit may fluctuate depending upon the size and the requirements of the particular contracts entered into in that period.

        The sale of new machines is cyclical in nature and sensitive to changes in general economic conditions, including fluctuations in market prices for copper, coal, oil, iron ore and other minerals as well as alternatives to these minerals. Many factors affect the supply and demand for minerals and oil and thus may affect our sale of products and services, including:

•

the level of production;



•

the levels of mineral inventories;



•

commodities prices;



•

the expected cost of developing new reserves;



•

the cost of conducting surface mining operations;



•

the level of surface mining activity;



•

worldwide economic activity;



•

substitution of new or competing inputs and mining methods;



•

national government political requirements;



•

environmental regulation; and



•

tax policies.

        If demand for mining services or surface mining equipment utilization rates decrease significantly, then demand for our products and services will decrease. We incurred annual net losses during recent years, which included periods of cyclically weak OEM sales. As a result of this cyclicality, we have experienced, and in the future could experience, extended periods of reduced sales and margins, which may affect the ability to satisfy our debt service obligations.

16

Regulations affecting the mining industry or electric utilities may reduce demand for our products and services

        Our principal customers are surface mining companies. Many of these customers supply coal as a power generating source for the production of electricity in the United States and other industrialized regions. The operations of these mining companies are geographically diverse and are subject to or affected by a wide array of regulations in the jurisdictions where they operate, including those with a direct impact on mining activities and those indirectly affecting their businesses, such as applicable environmental laws and an array of regulations governing the operation of electric utilities. As a result of changes in regulations and laws relating to the operation of mines, our customers' mining operations could be disrupted or curtailed by governmental authorities. The high cost of compliance with mining and environmental regulations may also induce customers to discontinue or limit their mining operations, and may discourage companies from developing new mines. Additionally, government regulation of electric utilities may adversely impact the demand for coal to the extent that such regulations cause electric utilities to select alternative energy sources and technologies as a source of electric power. Initiatives to regulate mercury emissions, and initiatives targeting acid rain or greenhouse gas emissions, could significantly depress coal consumption in Western economies. For more information about these regulations, see "Business—Regulations Affecting Our Customer Base."

Risks Related to our Class A Common Stock

Our stock price may be volatile, and you may not be able to resell your shares at or above the initial public offering price

        Prior to this offering, there has been no public market for shares of our Class A common stock. An active public trading market for our Class A common stock may not develop or, if it develops, may not be maintained after this offering, and the market price could fall below the initial public offering price. Factors such as quarterly variations in our financial results, announcements by us or others, developments affecting us, our customers and our suppliers and general market volatility could cause the market price of our Class A common stock to fluctuate significantly. As a result, you could lose all or part of your investment. We and the representatives of the underwriters will negotiate to determine the initial public offering price. The initial public offering price may be above the trading price following this offering.

Anti-takeover provisions in our charter documents and Delaware corporate law may make it difficult for our stockholders to replace or remove our current board of directors and could deter an unsolicited third party acquisition offer, which may adversely affect the marketability and market price of our Class A common stock

        Provisions in our amended and restated certificate of incorporation, or certificate of incorporation, and amended and restated bylaws, or bylaws, and in Delaware corporate law make it difficult for stockholders to change the composition of our board of directors in any one year, which consequently makes it difficult to change the composition of management. In addition, the same provisions may make it difficult and expensive for a third party to pursue a tender offer, change in control or takeover attempt that is opposed by our management and board of directors. Public stockholders who might desire to participate in this type of transaction may not have an opportunity to do so. These anti-takeover provisions could substantially impede the ability of public stockholders to benefit from a change in control or change our management and board of directors and, as a result, may adversely affect the market price of our Class A common stock and your ability to realize any potential change of control premium.

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Our board of directors can issue preferred stock without stockholder approval of the terms of such stock

        Our certificate of incorporation will authorize our board of directors, without stockholder approval, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions granted to or imposed upon the preferred stock, including voting rights, dividend rights, conversion rights, terms of redemption, liquidation preference, sinking fund terms, subscription rights and the number of shares constituting any series or the designation of a series. Our board of directors will be able to issue preferred stock with voting and conversion rights that could adversely affect the voting power of the holders of common stock, without stockholder approval. At the completion of this offering, no shares of preferred stock will be outstanding and we have no present plan to issue any shares of preferred stock.

Shares available for sale and future stock sales could decrease the market price of our stock

        Sales of shares of our common stock in the public market following this offering, or the perception that sales may occur (that is the presence of an "equity overhang"), could depress the market price of our Class A common stock. After this offering, we will have 8,557,177 shares of Class A common stock outstanding and 11,442,400 shares of Class B common stock outstanding, which shares will convert into shares of Class A common stock upon their sale or other transfer to an entity that is not an affiliate of AIP/BI. The number of shares of common stock available for sale in the public market is temporarily limited by restrictions under federal securities law and under lock-up agreements that our directors, executive officers and the holders of substantially all of our common stock have entered into with the underwriters. Those lock-up agreements restrict these persons from selling, pledging or otherwise disposing of their shares for a period of 180 days after the date of this prospectus without the prior written consent of Goldman, Sachs & Co. However, Goldman, Sachs & Co. may release all or any portion of the common stock from the restrictions of the lock-up agreements. The equity overhang might make it difficult or impossible for us to sell additional equity to raise capital. All of the shares sold in this offering will be freely tradable without restrictions or further registration under the Securities Act of 1933, as amended, or the Securities Act, except for any shares purchased by our affiliates as defined in Rule 144 of the Securities Act. The remaining shares outstanding after this offering will be available for sale into the public market after the expiration of the initial 180 day lock-up period, except for any shares purchased by our affiliates as defined in Rule 144 of the Securities Act. Additional shares of Class A common stock underlying options will become available for sale in the public market. We expect to file a registration statement on Form S-8 that will register approximately 1,802,400 shares of Class A common stock, covering the 802,400 shares of Class A common stock issuable pursuant to the exercise of existing options granted under our 1998 Management Stock Option Plan and approximately 1,000,000 shares of Class A common stock reserved for issuance under our 2004 Equity Incentive Plan.

        As restrictions on resale end, our stock price could drop significantly if the holders of these restricted shares sell them or the market perceives they intend to sell them. These sales may also make it more difficult for us to sell securities in the future at a time and at a price we deem appropriate.

Because AIP controls the majority of the voting power of our common stock, investors in this offering will not be able to determine the outcome of stockholder votes

        Following this offering AIP/BI, a subsidiary of the Fund, which is controlled by AIP will hold 100% of our Class B common stock. Our Class A common stock has one vote per share and our Class B common stock has two votes per share. As a result, after the completion of this offering, the Fund will control 72.8% of the combined voting power of all of our common stock, or 67.8% if

18

the underwriters' over-allotment option is exercised in full. So long as the Fund continues to hold, directly or indirectly, shares of common stock representing more than 50% of the combined voting power of our common stock, it will be able to direct the election of all of the members of our board of directors who will determine our strategic plans and financing decisions and appoint top management. The Fund will also be able to determine the outcome of substantially all matters submitted to a vote of our stockholders, including matters involving mergers, acquisitions and other transactions resulting in a change in control of us. The Fund does not have any obligation to us to either retain or dispose of our common stock.

Because AIP controls us, it may make decisions regarding us that conflict with your interests

        AIP, as our controlling stockholder, will be able to control decisions relating to our participation in acquisitions, divestitures or other transactions, and our pursuit of corporate opportunities. AIP may seek to cause us to take courses of action that, in its judgment, could enhance its investment in us, but which might involve risks to other holders of our common stock or adversely affect us or other investors, including investors in this offering.

Our ability to pay dividends is limited by credit facility provisions

        Our existing senior secured credit facility limits our ability to pay cash dividends on our capital stock. Our new senior secured credit facility, which we are currently negotiating, is also expected to limit our ability to pay dividends unless we meet specified financial tests. Any payment of dividends will be at the discretion of our board of directors after taking into account various factors, including our financial condition, operating results, cash needs, growth plans and contractual and other legal restrictions. Accordingly, investors may be required to rely on sales of their Class A common stock after price appreciation, which may or may not occur, as the only, or the primary, way to realize their investment. Some institutional investors cannot or will not invest in non-dividend paying equity securities.

You will incur immediate and substantial dilution as a result of this offering

        The initial public offering price is substantially higher than the book value per share of our Class A common stock. As a result, purchasers in this offering will experience immediate and substantial dilution of $15.23 per share in the tangible book value of the Class A common stock from the initial public offering price (assuming an initial public offering price of $17.00, the mid-point of the range set forth on the cover page of this prospectus). In addition, to the extent that currently outstanding options to purchase Class A common stock are exercised, there will be further dilution.

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FORWARD-LOOKING STATEMENTS

        This prospectus contains statements that constitute "forward-looking statements." These forward-looking statements may be identified by the use of predictive, future-tense or forward-looking terminology, such as "believes," "anticipates," "expects," "estimates," "intends," "may," "will" or similar terms. These statements speak only as of the date of such statements and we undertake no ongoing obligation to update these statements. These statements appear in a number of places in this prospectus and include statements regarding our intent, belief or current expectations of our directors, our officers or advisors with respect to, among other things:

•

trends affecting our financial condition, results of operations or future prospects;



•

our business and growth strategies;



•

our financing plans and forecasts; and



•

development of markets for our products.

        You are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those contained in the forward-looking statements as a result of various factors, some of which are unknown. The factors that could adversely affect our actual results and performance include, without limitation:

•

customers' production capacity, stockpiles, and production and consumption rates of copper, coal, iron, oil and other ores and minerals;



•

the cash flows of customers;



•

consolidation among customers and suppliers;



•

work stoppages at customers, suppliers or providers of transportation;



•

the timing, severity and duration of customer and industry buying cycles;



•

unforeseen patent, tax, product, environmental, employee health or benefit, or contractual liabilities that affect us;



•

litigation;



•

nonrecurring restructuring and other special charges incurred by us;



•

changes in accounting or tax rules or regulations that affect us;



•

changes in the relative values of currencies;



•

our leverage and debt service obligations;



•

our success in recruiting and retaining key managers and employees;



•

labor costs and labor relations; and



•

our plant capacity.

        The review of important factors above is not exhaustive, and should be read in conjunction with the other cautionary statements included in this prospectus. You are urged to carefully consider these factors and the "Risk Factors" that appear elsewhere in this prospectus. All forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statements.

20

USE OF PROCEEDS

        Our net proceeds from the sale of 7,941,177 shares of Class A common stock in this offering are estimated to be approximately $122.6 million, assuming an initial public offering price of $17.00 per share, the mid-point of the estimated offering price range shown on the cover of this prospectus, and after deducting estimated underwriting discounts and commissions and the estimated offering expenses, which are payable by us. In the event that the underwriters exercise their over-allotment option, shares sold due to the exercise will be shares held by AIP/BI and we will not receive any of the proceeds from this sale. We anticipate using the net proceeds from this offering together with $102.1 million from our new senior secured credit facility as follows (as if the proceeds were applied as of March 31, 2004):

•

approximately $154.9 million to redeem debt in connection with the retirement of all of our 9-³/4% Senior Notes due 2007, or Senior Notes (approximately $78.1 million of which will be paid to the Fund or its affiliates), including the full principal amount of and applicable call premium on the Senior Notes;



•

approximately $23.7 million to pay deferred interest due on the Senior Notes held by Holdings;



•

approximately $6.4 million to pay all amounts we owe to AIP under the Management Services Agreement, which will be terminated prior to this offering;



•

approximately $4.6 million to pay accrued interest on the Senior Notes and expenses in connection with the new senior secured credit facility ($0.3 million of which will be paid to the Fund and its affiliates); and



•

approximately $35.1 million to repay indebtedness under our existing senior secured credit facility, which will be terminated upon the completion of this offering. Our existing senior secured credit facility matures on January 8, 2005 and outstanding borrowings bear interest at a floating rate equal to either the prime rate plus an applicable margin (2% to 2.25%) or LIBOR plus an applicable margin (3.5% to 3.75%).

21

DIVIDEND POLICY

        We intend to pay cash dividends on our Class A and Class B common stock at an initial quarterly rate of $0.0575 per share (equal to $0.23 per year). The declaration and payment of future dividends to holders of our common stock will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, earnings, legal requirements and other factors as our board of directors deems relevant. We anticipate that the terms of our new senior secured credit facility will allow us to pay dividends on our common stock subject to limitations, including restrictions on the gross amount of dividends that may be paid and a prohibition on payments of dividends unless specified financial ratios and other performance covenants are met.

        As a privately-owned company, during each of the years ended December 31, 2002 and December 31, 2003, we did not pay a dividend to our stockholders.

22

CAPITALIZATION

        The following table sets forth our capitalization as of March 31, 2004:

•

on an actual basis; and



•

as adjusted for the sale of 7,941,177 shares of Class A common stock in this offering at an assumed initial public offering price of $17.00 per share, the mid-point of the estimated offering price range shown on the cover of this prospectus and for expected borrowings under the new senior secured credit facility, and after deducting underwriting discounts and commissions and estimated expenses, and the application of the net proceeds thereof as described under "Use of Proceeds."

        You should read this table together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements and accompanying notes included elsewhere in this prospectus.

		As of March 31, 2004
Dollars in thousands, except per share data
		Actual			As Adjusted
Cash and cash equivalents		$	4,450		$	4,450
Other short-term debt		$	263		$	263
Existing senior secured credit facility		$	35,055		$	—
Revolving portion of new senior secured credit facility		$	—		$	2,095
Current maturities of long-term debt		$	317		$	5,317
Long-term debt, excluding current maturities:
	New senior secured credit facility	$	—		$	95,000
	9-3/4% Senior Notes due 2007		150,000			—
	Other long-term debt		3,895			3,895
Total long-term debt, excluding current maturities			153,895			98,895
Preferred stock, par value $.01 per share—10,000,000 shares authorized; none issued			—			—
Common stock, par value $.01 per share—13,600,000 shares authorized; 12,130,800 shares issued			121			—
Class A common stock, par value $.01 per share—41,000,000 shares authorized; 8,557,177 shares issued and outstanding, as adjusted			—			86
Class B common stock, par value $.01 per share—25,000,000 shares authorized; 11,442,400 shares issued and outstanding, as adjusted			—			114
Additional paid-in capital			153,620			276,091
Treasury stock, at cost—72,400 shares			(851	)		(851	)
Accumulated deficit			(106,798	)		(113,615	)
Accumulated other comprehensive loss			(35,231	)		(35,231	)
Total shareholders' investment		$	10,861		$	126,594
Total capitalization		$	164,756		$	225,489

23

DILUTION

        If you invest in our Class A common stock, your interest will be diluted to the extent of the difference between the initial public offering price per share of our Class A common stock and the net tangible book value per share of our Class A common stock upon the completion of this offering.

        Our net tangible book value as of March 31, 2004 equaled approximately $(80.3) million, or $(6.66) per share of common stock. Net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the total number of shares of common stock outstanding. After giving effect to the sale of shares of Class A common stock offered by us in this offering at the assumed initial public offering price of $17.00 per share (the mid-point of the estimated price range shown on the cover page of this prospectus) and after deducting the estimated underwriting discounts and commissions and offering expenses payable by us, our net tangible book value, as adjusted, as of March 31, 2004 would have equaled approximately $35.4 million, or $1.77 per share of common stock. This represents an immediate increase in net tangible book value of $8.43 per share to our existing shareholders and an immediate dilution in net tangible book value of $15.23 per share to new investors of Class A common stock in this offering. The following table illustrates this per share dilution to new investors purchasing our Class A common stock in this offering.

Assumed initial public offering price per Class A common share				$	17.00
	Net tangible book value per common share as of March 31, 2004	(6.66	)
	Increase in net tangible book value per Class A common share attributable to this offering	8.43
Net tangible book value per Class A common share after this offering					1.77
Dilution per Class A common share to new investors				$	15.23

        The following table as of March 31, 2004 summarizes the differences between our existing shareholders and new investors with respect to the number of shares of Class A and Class B common stock issued by us, the total consideration paid and the average price per share paid. The calculations with respect to Class A common shares purchased by new investors in this offering reflect the initial public offering price of $17.00 per share before deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

	Shares purchased			Total consideration
								Average price per share
	Number	Percentage		Amount		Percentage
Existing shareholders, officers, directors and affiliated parties	12,058,400	60.3	%	$	143,631,700	51.5	%	$	11.91
New investors	7,941,177	39.7	%	$	135,000,009	48.5		$	17.00
Total	19,999,577	100.0	%	$	278,631,709	100.0	%

        The foregoing discussion and table assume no exercise of any outstanding options to purchase Class A common stock. As of March 31, 2004, 1,018,000 shares were subject to outstanding options, 573,600 of which are at a strike price of $0.125 per share, and 444,400 of which are at a strike price of $12.50 per share, for a weighted average exercise price of $5.53 per share. To the extent these options are exercised, there will be further dilution to new investors.

        The exercise of all options to purchase shares of Class A common stock with a strike price less than the offering price (based on the midpoint of the price range set forth on the cover of this prospectus), would increase the dilution to new investors an additional $0.08 per share, to $15.31 per share.

        The underwriters' exercise of their over-allotment option in full would not affect the dilution to new investors and would increase the number of shares held by new investors to 9,132,353, or approximately 45.7% of the total number of shares of our common stock outstanding after this offering. In the event of the exercise in full of the over-allotment option, AIP/BI would sell 1,191,176 shares of Class B common stock with such shares automatically converting into an equal number of shares of Class A common stock upon such sale.

        Upon the completion of this offering, AIP/BI will be the holder of 100% of our outstanding shares of Class B common stock. Total consideration for these shares was $143.0 million, and the average price per share was $12.50.

24

SELECTED CONSOLIDATED FINANCIAL DATA

        The following table sets forth summary historical financial data for our operations as of and for the five fiscal years ended December 31, 2003 and as of and for the three months ended March 31, 2003 and 2004. We derived the selected financial information for each of the three years ended December 31, 2001, 2002 and 2003 from our audited consolidated financial statements and the related notes included elsewhere in this prospectus. We derived the selected financial information for the years ended December 31, 1999 and 2000 from our audited consolidated financial statements and the related notes not included elsewhere in this prospectus. We derived the selected financial information for the three months ended March 31, 2003 and 2004 from our unaudited consolidated financial statements and the related notes included elsewhere in this prospectus. You should read this summary historical financial information together with the consolidated financial statements and accompanying notes of our operations and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

																	For the three months ended March 31,
		For the years ended December 31,
Dollars in thousands, except per share data
		1999			2000			2001			2002			2003			2003			2004
Consolidated Statements of Operations Data:
Sales		$	318,635		$	280,443		$	290,576		$	289,598		$	337,695		$	60,882		$	97,128
Cost of products sold			267,323			239,134			243,791			233,516			268,162			46,324			77,471
	Gross profit		51,312			41,309			46,785			56,082			69,533			14,558			19,657
Selling, general and administrative expenses			40,362			37,066			30,806			32,214			42,747			8,791			14,056
Research and development expenses			7,646			7,299			5,900			6,512			4,594			1,154			1,354
Amortization of intangible assets			4,642			4,485			4,292			1,647			1,647			412			412
	Operating earnings (loss)		(1,338	)		(7,541	)		5,787			15,709			20,545			4,201			3,835
Interest expense			19,698			22,094			20,885			18,672			17,687			4,523			4,125
Other (income) expense—net			(840	)		97			(8,045	)		2,776			856			204			345
Earnings (loss) before income taxes			(20,196	)		(29,732	)		(7,053	)		(5,739	)		2,002			(526	)		(635	)
Income tax expense			2,379			3,065			3,410			5,047			5,583			806			1,380
Net loss		$	(22,575	)	$	(32,797	)	$	(10,463	)	$	(10,786	)	$	(3,581	)	$	(1,332	)	$	(2,015	)
Basic and diluted net loss per share data:
	Net loss per share	$	(1.96	)	$	(2.84	)	$	(.91	)	$	(.94	)	$	(.31	)	$	(.12	)	$	(.17	)
	Weighted average shares		11,539,728			11,529,264			11,484,800			11,484,800			11,710,312			11,484,800			12,058,400
Other Financial Data:
EBITDA(1)		$	15,720		$	9,173		$	30,234		$	28,104		$	33,086		$	7,309		$	7,008
AIP management fee and expenses(2)			1,892			1,942			1,587			1,610			3,185			410			500
Non-cash stock compensation expense(3)			—			—			—			—			1,792			—			4,148
Restructuring charges (severance)			1,212			2,689			899			1,308			571			127			54
Gain on sale of shares received in demutualization of The Principal Financial Group			—			—			(8,704	)		—			—			—			—
Loss on sale of fixed assets(4)			4,392			7			750			655			626			57			8
Consolidated Statements of Cash Flows Data:
Cash provided by (used in) operating activities		$	(4,754	)	$	(599	)	$	(1,309	)	$	9,705		$	22,938		$	(78	)	$	1,455
Cash provided by (used in) investing activities		$	(13,240	)	$	(2,513	)	$	2,107		$	3,816		$	(3,303	)	$	(302	)	$	(701	)
Cash provided by (used in) financing activities		$	17,980		$	2,568		$	(92	)	$	(16,803	)	$	(18,990	)	$	1,279		$	(2,404	)

25

	As of December 31,											March 31,
Dollars in thousands
	1999		2000		2001		2002			2003		2004
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	8,369	$	6,948	$	7,218	$	4,189		$	6,075	$	4,450
Property, plant and equipment—net		95,805		86,553		77,203		62,479			57,433		55,210
Total assets		416,987		367,766		355,745		346,878			362,143		349,800
Total debt		221,972		224,671		223,486		208,730			191,769		189,530
Long-term liabilities, including long-term debt		245,005		250,328		282,302		283,574			231,689		229,721
Total liabilities		322,837		321,850		338,573		355,009			352,420		338,939
Common shareholders' investment (deficit)		94,150		45,916		17,172		(8,131	)		9,723		10,861

(1)

EBITDA is defined as earnings (loss) before interest, income taxes, depreciation and amortization. EBITDA, a measure used by management to measure liquidity and performance, is reconciled to net loss and net cash provided by (used in) operating activities in the following table. Our management believes EBITDA is useful to the investors because it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. EBITDA is not a recognized term under GAAP and does not purport to be an alternative to net earnings (loss) as an indicator of operating performance or to net cash provided by (used in) operating activities as a measure of liquidity. Because not all companies use identical calculations, this presentation of EBITDA may not be comparable to other similarly titled measures of other companies. Additionally, EBITDA is not intended to be a measure of free cash flow for management's discretionary use, as it does not consider certain cash requirements such as interest payments, tax payments and debt service requirements. The amounts shown for EBITDA as presented herein differ from the amounts calculated under the definition of EBITDA used in our debt instruments. The definition of EBITDA used in our debt instruments is further adjusted for certain cash and non-cash charges and is used to determine compliance with financial covenants and our ability to engage in certain activities such as incurring additional debt and making certain payments.

Following is a reconciliation of net loss as shown in the Consolidated Statements of Operations to EBITDA and a reconciliation of EBITDA to net cash provided by (used in) operating activities as shown in the Consolidated Statements of Cash Flows:

																For the three months ended March 31,
	For the years ended December 31,
Dollars in thousands
	1999			2000			2001			2002			2003			2003			2004
Net loss	$	(22,575	)	$	(32,797	)	$	(10,463	)	$	(10,786	)	$	(3,581	)	$	(1,332	)	$	(2,015	)
Interest income		(630	)		(403	)		(252	)		(243	)		(322	)		(27	)		(65	)
Interest expense		19,698			22,094			20,885			18,672			17,687			4,523			4,125
Income taxes		2,379			3,065			3,410			5,047			5,583			806			1,380
Depreciation		11,200			11,393			11,240			10,666			10,831			2,672			2,761
Amortization		5,648			5,821			5,414			4,748			2,888			667			822
EBITDA		15,720			9,173			30,234			28,104			33,086			7,309			7,008
Changes in assets and liabilities		(3,419	)		14,977			454			4,422			10,382			(2,142	)		(4,269	)
Non-cash stock compensation expense		—			—			—			—			1,792			—			4,148
Loss on sale of fixed assets		20			7			750			655			626			57			8
Loss on fixed assets impairment		4,372			—			—			—			—			—			—
Gain on sale of the shares received in demutualization of The Principal Financial Group		—			—			(8,704	)		—			—			—			—
Interest income		630			403			252			243			322			27			65
Interest expense		(19,698	)		(22,094	)		(20,885	)		(18,672	)		(17,687	)		(4,523	)		(4,125	)
Income tax expense		(2,379	)		(3,065	)		(3,410	)		(5,047	)		(5,583	)		(806	)		(1,380	)
Net cash provided by (used in) operating activities	$	(4,754	)	$	(599	)	$	(1,309	)	$	9,705		$	22,938		$	(78	)	$	1,455

(2)

Excludes fees paid to AIP or its affiliates and advisors for services performed for us outside the scope of the Management Services Agreement for the years ended December 31, 1999, 2000, 2001, 2002 and 2003 and for the three months ended March 31, 2003 and 2004 of $464,000, $591,000, $285,000, $184,000, $285,000, $45,000 and $44,000, respectively. Upon the completion of this offering, we will not have any continuing arrangements with AIP or its affiliates, other than as disclosed under "Certain Relationships and Related Transactions."

(3)

Non-cash stock compensation expense represents the charge recorded relating to our existing book value stock option plan accounted for in accordance with EITF Issue No. 87-23. The stock option plan indicates that upon successful completion of an initial public offering, fair market value is defined as the trading price of our common stock. Non-cash stock compensation expense will continue to be recorded until the completion of this offering. No further compensation expense will be recorded related to this plan in periods subsequent to the period in which this offering occurs. See Unaudited As Adjusted Financial Data.

(4)

1999 fixed asset loss includes a $4.4 million fixed asset impairment charge at the former manufacturing facility in Boonville, Indiana.

26

UNAUDITED AS ADJUSTED FINANCIAL DATA

        The unaudited as adjusted consolidated statement of operations data give effect to this offering and our borrowings under the new senior secured credit facility along with the application of net proceeds thereof as if they occurred as of January 1, 2003. The as adjusted balance sheet data give effect to this offering and our borrowings of $102.1 million under our new senior secured credit facility as of March 31, 2004. We will use the net proceeds to repay the Senior Notes and our existing senior secured credit facility, to pay deferred interest on the Senior Notes owned by Holdings, to pay deferred fees owed to AIP under the Management Services Agreement, which will terminate prior to this offering, and to pay other fees and expenses.

        The as adjusted consolidated statements of operations do not include nonrecurring charges of approximately $3.6 million representing the write-off of unamortized financing costs of approximately $1.8 million and additional non-cash stock compensation expense of approximately $1.8 million to be recognized upon successful completion of this initial public offering. The historical selling, general and administrative expenses for the year ended December 31, 2003 and the three months ended March 31, 2004 include $1.8 million and $4.1 million, respectively, of non-cash stock compensation expense related to our existing book value stock option plan.

        The as adjusted financial data do not purport to project our results of operations for the current year or for any future period. The as adjusted financial data are based upon, and should be read in connection with, the sections of this prospectus entitled, "The Offering" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and notes thereto included elsewhere in this prospectus.

			Year ended December 31, 2003
Dollars in thousands, except per share data
			Historical			Adjustment			As Adjusted
Consolidated Statement of Operations Data:
Sales			$	337,695					$	337,695
Cost of products sold				268,162						268,162
	Gross profit			69,533						69,533
Selling, general and administrative expenses(1)				42,747		$	(3,185	)		39,562
Research and development expenses				4,594						4,594
Amortization of intangible assets				1,647						1,647
	Operating earnings			20,545			3,185			23,730
Interest expense(2)(3)				17,687			(11,635	)		6,052
Other (income) expense—net(4)				856			(188	)		668
Earnings before income taxes				2,002			15,008			17,010
Income tax expense(5)				5,583			300			5,883
Net earnings (loss)			$	(3,581	)	$	14,708		$	11,127
Basic and diluted net earnings (loss) per share data:
	Net earnings (loss) per share:
		Basic	$	(.31	)				$	.57
		Diluted	$	(.31	)				$	.54
	Weighted average shares:
		Basic		11,710,312						19,651,486
		Diluted		11,710,312						20,684,318

(1)

Adjustment to selling, general and administrative expenses reflects the elimination of the expenses in 2003 pursuant to the Management Services Agreement.

(2)

Adjustment to interest expense reflects the reduction in 2003 of interest expense due to (i) retirement of the Senior Notes as of January 1, 2003; (ii) retirement of the existing senior secured credit facility; and (iii) increased borrowings under the new senior secured credit facility at an assumed 4.25% interest rate.

(3)

A 0.125% change in the interest rate payable on the outstanding amount of the new senior secured credit facility would change annual interest expense by $0.1 million before the effect of income taxes.

(4)

Adjustment to amortization expense to reflect the amortization of new deferred financing costs over the term of the new senior secured credit facility.

(5)

Adjustment to income tax expense reflects the federal alternative minimum tax consequences of the above items as we have valuation allowances against federal income tax loss carryforwards.

27

			Three months ended March 31, 2003
Dollars in thousands, except per share data
			Historical			Adjustment			As Adjusted
Consolidated Statement of Operations Data:
Sales			$	60,882					$	60,882
Cost of products sold				46,324						46,324
	Gross profit			14,558						14,558
Selling, general and administrative expenses(1)				8,791		$	(410	)		8,381
Research and development expenses				1,154						1,154
Amortization of intangible assets				412						412
	Operating earnings			4,201			410			4,611
Interest expense(2)(3)				4,523			(2,977	)		1,546
Other (income) expense—net(4)				204			8			212
Earnings (loss) before income taxes				(526	)		3,379			2,853
Income tax expense(5)				806			68			874
Net earnings (loss)			$	(1,332	)	$	3,311		$	1,979
Basic and diluted net earnings (loss) per share data:
	Net earnings (loss) per share:
		Basic	$	(.12	)				$	.10
		Diluted	$	(.12	)				$	.10
	Weighted average shares:
		Basic		11,484,800						19,425,977
		Diluted		11,484,800						20,683,529

(1)

Adjustment to selling, general and administrative expenses reflects the elimination of the expenses in 2003 pursuant to the Management Services Agreement.

(2)

Adjustment to interest expense reflects the reduction in 2003 of interest expense due to (i) retirement of the Senior Notes as of January 1, 2003; (ii) retirement of the existing senior secured credit facility; and (iii) increased borrowings under the new senior secured credit facility at an assumed 4.25% interest rate.

(3)

A 0.125% change in the interest rate payable on the outstanding amount of the new senior secured credit facility would change annual interest expense by $0.1 million before the effect of income taxes.

(4)

Adjustment to amortization expense to reflect the amortization of new deferred financing costs over the term of the new senior secured credit facility.

(5)

Adjustment to income tax expense reflects the federal alternative minimum tax consequences of the above items as we have valuation allowances against federal income tax loss carryforwards.

28

			Three months ended March 31, 2004
Dollars in thousands, except per share data
			Historical			Adjustment			As Adjusted
Consolidated Statement of Operations Data:
Sales			$	97,128					$	97,128
Cost of products sold				77,471						77,471
	Gross profit			19,657						19,657
Selling, general and administrative expenses(1)				14,056		$	(500	)		13,556
Research and development expenses				1,354						1,354
Amortization of intangible assets				412						412
	Operating earnings			3,835			500			4,335
Interest expense(2)(3)				4,125			(2,941	)		1,184
Other (income) expense—net(4)				345			(158	)		187
Earnings (loss) before income taxes				(635	)		3,599			2,964
Income tax expense(5)				1,380			72			1,452
Net earnings (loss)			$	(2,015	)	$	3,527		$	1,512
Basic and diluted net earnings (loss) per share data:
	Net earnings (loss) per share:
		Basic	$	(.17	)				$	.08
		Diluted	$	(.17	)				$	.07
	Weighted average shares:
		Basic		12,058,400						19,999,577
		Diluted		12,058,400						20,686,595

(1)

Adjustment to selling, general and administrative expenses reflects the elimination of the expenses in 2004 pursuant to the Management Services Agreement.

(2)

Adjustment to interest expense reflects the reduction in 2004 of interest expense due to (i) retirement of the Senior Notes as of January 1, 2003; (ii) retirement of the existing senior secured credit facility; and (iii) increased borrowings under the new senior secured credit facility at an assumed 4.25% interest rate.

(3)

A 0.125% change in the interest rate payable on the outstanding amount of the new senior secured credit facility would change annual interest expense by $0.1 million before the effect of income taxes.

(4)

Adjustment to amortization expense to reflect the amortization of new deferred financing costs over the term of the new senior secured credit facility.

(5)

Adjustment to income tax expense reflects the federal alternative minimum tax consequences of the above items as we have valuation allowances against federal income tax loss carryforwards.

29

			As of March 31, 2004
Dollars in thousands, except per share data
			Actual			Adjustments			As Adjusted
Consolidated Condensed Balance Sheet Data:
Assets
Current Assets			$	194,947					$	194,947
Other Assets:
	Restricted funds on deposit			583						583
	Goodwill			55,860						55,860
	Intangible assets—net			35,312						35,312
	Other assets(1)			7,888		$	2,033			9,921
				99,643			2,033			101,676
Property, plant and equipment—net				55,210						55,210
			$	349,800		$	2,033		$	351,833
Liabilities and Common Shareholders' Investment (Deficit)
Current Liabilities:
	Accounts payable and accrued expenses(2)		$	59,475		$	(1,415	)	$	58,060
	Liabilities to customers on uncompleted contracts and warranties			9,131						9,131
	Income taxes			4,977						4,977
	Borrowings under existing senior secured credit facility and other short-term obligations(3)			35,318			(35,055	)		263
	Borrowings under new senior secured revolving credit facility(3)			—			2,095			2,095
	Current maturities of long-term debt(3)			317			5,000			5,317
		Total Current Liabilities		109,218			(29,375	)		79,843
Long-Term Liabilities:
	Liabilities to customers on uncompleted contracts and warranties			800						800
	Postretirement benefits			13,274						13,274
	Deferred expenses, pension and other			32,427						32,427
	Payable to American Industrial Partners(4)			5,665			(5,665	)		—
	Interest payable to Holdings(5)			23,660			(23,660	)		—
				75,826			(29,325	)		46,501
Long-Term Debt, less current maturities (Actual includes $75,635 of Senior Notes held by Holdings)(3)(6)				153,895			(55,000	)		98,895
Shareholders' Investment (Deficit):
	Preferred stock, par value $.01 per share—10,000,000 shares authorized; none issued			—			—			—
	Common stock, par value $.01 per share—authorized 13,600,000 shares authorized; 12,130,800 shares issued			121			(121	)		—
	Class A common stock, par value $.01 per share—41,000,000 shares authorized; 8,557,177 shares issued and outstanding, as adjusted			—			86			86
	Class B common stock, par value $.01 per share—25,000,000 shares authorized; 11,442,400 shares issued and outstanding, as adjusted			—			114			114
	Additional paid-in capital(7)			153,620			122,471			276,091
	Treasury stock, at cost—72,400 shares			(851	)					(851	)
	Accumulated deficit(8)			(106,798	)		(6,817	)		(113,615	)
	Accumulated other comprehensive loss			(35,231	)					(35,231	)
				10,861			115,733			126,594
			$	349,800		$	2,033		$	351,833

(1)

Adjustment to other assets reflects the write-off of unamortized financing costs related to the Senior Notes and the capitalization of financing costs associated with the new senior secured credit facility.

(2)

Adjustment to accounts payable and accrued expenses reflects the payment of $0.6 million of accrued interest on the Senior Notes and payment to AIP of $0.8 million of unpaid fees and expenses pursuant to the Management Services Agreement.

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(3)

Adjustment to borrowings reflects the repayment of the full amount outstanding on the existing senior secured credit facility and the proceeds from the new senior secured credit facility. The new senior secured credit facility will include a $100 million term loan, $5 million of which is due within the next twelve months, and a senior secured revolving credit facility of up to $50 million.

(4)

Adjustment to long-term liabilities payable to American Industrial Partners reflects the payment to AIP for unpaid deferred fees and expenses pursuant to the Management Services Agreement.

(5)

Adjustment to interest payable to Holdings reflects the payment of accrued interest on the Senior Notes owned by Holdings.

(6)

Adjustment to borrowings reflects the retirement of the $150 million of Senior Notes.

(7)

Adjustment to additional paid-in capital reflects the issuance of $135 million of Class A common stock in this offering less $12.4 million in underwriting fees and other expenses associated with this offering.

(8)

Adjustment to accumulated deficit reflects the payment of $4.9 million in redemption premium associated with the retirement of the Senior Notes and write-off of approximately $1.9 million of unamortized deferred financing costs related to the Senior Notes. The adjustment does not include nonrecurring charges of approximately $1.8 million representing additional non-cash stock compensation expense.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following discussion and analysis of the financial condition and results of our operations should be read in conjunction with the consolidated financial statements and accompanying notes of our operations included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy, constitutes forward-looking statements that involve risks and uncertainties. Please see "Forward-Looking Statements" and "Risk Factors" for more information. You should review "Risk Factors" for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained herein.

Overview

Business

        We design, manufacture and market large excavation machinery used for surface mining, and provide comprehensive aftermarket services, supplying replacement parts and offering maintenance and repair contracts and services for these machines. We manufacture our OEM products and the majority of aftermarket parts at our facility in South Milwaukee, Wisconsin. Our principal OEM products are draglines, electric mining shovels and rotary blasthole drills, which are used primarily by customers who mine copper, coal, oil sands and iron ore throughout the world. In addition, we provide aftermarket services in mining centers throughout the world, including Argentina, Australia, Brazil, Canada, Chile, China, England, India, Peru, South Africa and the United States. The largest markets for this mining equipment have been in the United States, South America, Australia, South Africa and Canada. In the future, China, India and Canada are expected to be increasingly important markets.

        The market for OEM machines is closely correlated with customer expectations of sustained strength in prices of surface-mined commodities. Growth in demand for these commodities is a function of, among other things, economic activity, population increases and continuing improvements in standards of living in many areas of the world. In 2001 and 2002, the market prices of many surface mined commodities were generally weak. In 2003 and during the first quarter of 2004, market prices for copper, coal, iron ore and oil increased. Factors that could support sustained demand for these key commodities include continued economic growth in China, India and the developing world and renewed economic strength in industrialized countries.

        Our aftermarket parts and service operations, which have accounted for approximately 70% of sales over the past ten years, tend to be more consistent than OEM machine sales. Our complex machines are typically kept in continuous operation from 15 to 40 years, requiring regular maintenance and repair throughout their productive lives. The size of our installed base of surface mining equipment and our ability to provide on-time delivery of reliable parts and prompt service are important drivers of aftermarket sales.

        While we continue to forecast increased revenues attributable to increased demand related to both aftermarket parts sales and OEM machine sales relative to prior periods of weaker OEM sales, we maintain ongoing efforts to improve efficiency and contain costs. We have recorded restructuring charges in recent years. While we do not anticipate significant restructuring charges in future years, we do continually evaluate all opportunities for reductions to operating costs. We do not believe these previous actions, including headcount reductions, will impact our ability to respond to increased demand for our products.

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        A substantial portion of our sales and operating earnings are attributable to operations located outside the United States. We sell OEM machines, including those sold directly to foreign customers, and most of our aftermarket parts in United States dollars, with limited aftermarket parts sales denominated in the local currencies of Australia, Canada, South Africa, Brazil, Chile and the United Kingdom. Aftermarket services are paid for primarily in local currency which is naturally hedged by our payment of local labor in local currency. In the aggregate, approximately 70% of our 2003 sales were priced in United States dollars.

        Over the past three years, during a period of generally weak commodity prices, we increased gross profits by improving manufacturing overhead variances, achieving productivity gains and growing our high margin aftermarket parts and services business.

        Following is a discussion of key measures which contributed to our operating results.

Key Measures

Commodity Prices

        Demand for our OEM machines is driven in large part by the prices of certain commodities, such as copper, coal, oil and iron ore. The prices of these commodities have risen in recent periods, particularly in the fourth quarter of 2003 and the first quarter of 2004. Prices moderated to some degree in the beginning of the second quarter of 2004. The following table shows certain commodity prices as of May 31, 2004, March 31, 2004 and as of December 31, 2001, 2002 and 2003:

	December 31,						March 31,		May 31,
	2001		2002		2003		2004		2004
Copper $/lb.(1)	$	0.66	$	0.70	$	1.05	$	1.39	$	1.28
Japanese coking coal $/tonne(2)(3)	$	42.23	$	40.97	$	42.97	$	52.87		N/A(4)
Asian steam coal marker $/tonne(5)(3)	$	31.46	$	31.22	$	54.82	$	72.17	$	74.54
Heavy oil $/barrel(6)(3)	$	8.57	$	19.63	$	18.39	$	21.83	$	24.01
South American iron ore $/tonne(7)(3)	$	30.03	$	29.31	$	31.95	$	37.90	$	37.90

(1)

Source: London Metal Exchange.

(2)

Source: The Institute for Energy Economics, Japan.

(3)

The price for this commodity is not determinable by reference to a commodity exchange. The referenced source provides indicative contract prices which we believe are representative of prevailing price trends.

(4)

As of the date of this prospectus, this information was not available. The indicative contract price as of April 30, 2004 was $64.79.

(5)

Source: McCloskey Coal News.

(6)

Source: Sproule Associates, Ltd. The prices quoted are monthly average contract prices for Hardisty (Canada) Heavy Crude Oil and were converted from Canadian to United States dollars based on the average prevailing exchange rate for the applicable month.

(7)

Source: Skillings Mining Review.

On-Time Delivery and Lead Times

        Due to the high fixed cost structure of our customers, it is critical that they avoid equipment down-time. On-time delivery and reduced lead time of aftermarket parts and services allow customers to reduce downtime and are therefore a key measure of customer service, and we believe they are fundamental drivers of aftermarket customer demand. Our on-time delivery percentage in the aftermarket, based on achieved promised delivery dates to customers, has

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increased from approximately 74% in 2001 to 92% for 2003 and 93% for the first quarter of 2004. Lead times for deliveries were flat in 2003 as compared to 2002.

        We increased on-time deliveries in 2003 and reduced lead times from 2001 to 2002 and retained improvements in 2003 despite increasing component complexity by focusing on development of key shop floor metrics, improved communication between sales, manufacturing and shipping, instituting daily or weekly meetings to resolve issues, changing shipment methods and hiring an additional supervisory person dedicated to on-time delivery. Information resources useful in accomplishing many of these improvements are now available from our new enterprise resource planning, or ERP, system.

Productivity

        Sales per full time equivalent employee is a measure of our operational efficiency. Sales per full time equivalent employee were $239,000 for the first quarter of 2004 and $219,000 for 2003 compared with $186,000 for 2001. This productivity increase is primarily due to the application of worldwide sales and inventory ERP systems, and personnel upgrades which collectively allowed sales to grow with minimal changes in headcount. For a discussion of our ERP system, please see "Business—Information Technology Infrastructure."

Warranty Claims

        Product quality is another key driver of customer satisfaction and, as a result, sales. Management uses warranty claims as a percentage of total sales as one objective benchmark to evaluate product quality. During 2003 and the first quarter of 2004, warranty claims as a percentage of total sales were less than 1%.

Backlog

        Backlog is a tool which allows management to forecast sales and production requirements. Due to the high cost of some OEM products, backlog is subject to volatility, particularly over relatively short periods. A portion of our backlog is related to multi-year contracts that will generate revenue in future years. The following table shows backlog at December 31, 2001, 2002 and 2003 and March 31, 2004 as well as the portion of backlog which is or was expected to be recognized within 12 months of these dates:

	December 31,						March 31,
Dollars in thousands
	2001		2002		2003		2004
Next 12 months	$	107,690	$	94,571	$	122,263	$	153,554
Total	$	229,752	$	245,695	$	233,642	$	283,962

Inventory

        Inventory is one of our significant assets. As of March 31, 2004 we had $121.3 million in inventory. We turned our inventory at an annual rate of approximately 2.3 times in 2003 and 2.4 times in the first quarter of 2004, which we believe is in line with other manufacturers of surface mining equipment. We believe that we have appropriately recorded at the lower of cost or market any slow moving or obsolete inventory in our financial statements. The factors that could reduce the carrying value of our inventory include reduced demand for aftermarket parts due to decreased sales volumes attributable to new or improved technology or customers' discontinuing use of our older model machines, which could render inventory obsolete or excess. With the exception of the normal inventory obsolescence provision recorded in the ordinary course of business, we do not anticipate recording any significant inventory impairments.

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Results of Operations

Three Months Ended March 31, 2004 Compared to Three Months Ended March 31, 2003

Sales

        Sales for the first quarter of 2004 were $97.1 million compared with $60.9 million for the first quarter of 2003. Sales of aftermarket parts and services for the first quarter of 2004 were $69.4 million, an increase of 29.5% from $53.6 million in the first quarter of 2003. The increase was primarily due to an increase in customer equipment utilization and increased discretionary spending. Machine sales for the first quarter of 2004 were $27.7 million, an increase of 281.8% from $7.2 million in the first quarter of 2003. The increase in the first quarter of 2004 was primarily due to the recognition of sales on draglines. Dragline sales were $13.5 million in the first quarter of 2004 and $2.6 million in the first quarter of 2003. Machine sales in both periods were primarily related to a dragline sale entered into in 2002 with a coal customer in the United States. The lower amount of sales in 2003 was due to the machine being in the earlier stages of manufacturing at that time. In early 2004, we entered into a dragline sale with a coal customer in China. Manufacture of the dragline commenced in the first quarter of 2004 and sales of $2.2 million were recognized in that quarter. There was also an increase in the recognition of sales of electric mining shovels in the first quarter of 2004. Approximately $4.2 million of the increase in sales for the first quarter of 2004 was attributable to a weakening United States dollar, primarily impacting aftermarket sales.

Gross Profit

        Gross profit for the first quarter of 2004 was $19.7 million or 20.2% of sales compared with $14.6 million or 23.9% of sales for the first quarter of 2003. The increase in gross profit was primarily due to an increase in sales. The decrease in the gross profit percentage for 2004 was primarily due to an increase in lower margin OEM sales which was partially offset by manufacturing overhead variance improvements of approximately $2.1 million compared with 2003 due to continuing cost controls and higher manufacturing volumes. Also included in gross profit for 2004 and 2003 was $1.3 million and $1.3 million, respectively, of additional depreciation expense as a result of purchase price allocation to plant and equipment in connection with AIP's acquisition of us. Approximately $713,000 of the increase in gross profit in the first quarter of 2004 was attributable to a weakening United States dollar.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses for the first quarter of 2004 were $14.1 million or 14.5% of sales compared with $8.8 million or 14.4% of sales for 2003. Selling, general and administrative expenses in 2004 included $4.1 million related to non-cash stock-based employee compensation compared to $0 in 2003. This expense represents the charge recorded relating to the existing book value stock option plan accounted for in accordance with EITF Issue No. 87-23. Selling expenses increased by $1.0 million in 2004 primarily due to increased sales efforts in South America and higher foreign costs as a result of the weakened U.S. dollar, but remained constant as a percentage of sales. In 2004, management incentive accruals increased by $271,000 from 2003. AIP expenses pursuant to the Management Services Agreement were $500,000 in 2004 as compared with $410,000 in 2003. Foreign currency transaction gains totaled $645,000 in the first quarter of 2004 compared with a loss of $243,000 in the first quarter of 2003.

Research and Development Expenses

        Research and development expenses for the first quarter of 2004 were $1.4 million compared to $1.2 million for the first quarter of 2003.

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Amortization of Intangible Assets

        Amortization of intangible assets, consisting of engineering drawings, bill of material listings and software, for each of the first quarters of 2004 and 2003 was $412,000.

Operating Earnings

        Operating earnings for the first quarter of 2004 were $3.8 million or 3.9% of sales, compared with $4.2 million or 6.9% of sales, for the first quarter of 2003. The decline was primarily due to the increase in non-cash stock-based employee compensation of $4.1 million.

Interest Expense

        Interest expense for the first quarter of 2004 was $4.1 million compared with $4.5 million for 2003. The decrease in interest expense in 2004 was primarily due to reduced borrowings.

Other Income and Expense—Net

        Other income and expense—net was $345,000 of expense and $204,000 of expense for the first quarters of 2004 and 2003, respectively. Debt issuance cost amortization was $411,000 and $249,000 for 2004 and 2003, respectively. The amounts for 2004 and 2003 include costs related to the Loan and Security Agreement entered into on March 7, 2002 as described further in "Liquidity and Capital Resources—Financing Cash Flows" below.

Income Taxes

        Income tax expense for the first quarters of 2004 and 2003 consisted primarily of foreign taxes at applicable statutory rates. As of March 31, 2004, we had approximately $31.2 million of federal net operating loss carryforwards that expire in the years 2005 through 2021 to offset against future federal taxable income.

Year Ended December 31, 2003 Compared to Year Ended December 31, 2002

Sales

        Sales for 2003 were $337.7 million compared with $289.6 million for 2002. Sales of aftermarket parts and services for 2003 were $272.1 million, an increase of 12.4% from $242.0 million in 2002. The increase in aftermarket parts sales was primarily due to increased customer satisfaction, which we achieved through timely delivery of high quality aftermarket parts due to operational efficiencies and supplier alliances. Increased customer equipment utilization and increased discretionary spending has also favorably impacted sales of aftermarket parts.

        Machine sales for 2003 were $65.6 million, an increase of 37.8% from $47.6 million in 2002. The increase in 2003 was attributable to revenues recognized on a dragline ordered late in 2002. While the contract was signed in 2002, only minimal costs and revenues were incurred in 2002 as the primary construction of the machine took place in 2003. Revenues recorded related to the sale of draglines in 2003 were $18.1 million compared to $1.8 million in 2002.

Gross Profit

        Gross profit for 2003 was $69.5 million or 20.6% of sales compared with $56.1 million or 19.4% of sales for 2002. The increase in the gross profit percentage for 2003 was primarily due to improved manufacturing overhead variances and a higher mix of aftermarket parts sales. Manufacturing overhead variances improved by approximately $3 million compared with 2002 due to continuing cost controls and higher manufacturing volumes, and warranty expense declined by

36

approximately $800,000 from 2002. In the aggregate, there were no significant increases in raw material costs in 2003. Also included in gross profit for 2003 and 2002 was $5.1 million and $5.1 million, respectively, of additional depreciation expense as a result of purchase price allocation to plant and equipment in connection with AIP's acquisition of us. Approximately $3.3 million of the increase in 2003 was attributable to a weakening United States dollar, see "Foreign Currency Fluctuations" below.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses for 2003 were $42.7 million or 12.7% of sales compared with $32.2 million or 11.1% of sales for 2002. Selling expenses increased by $2.6 million in 2003 primarily due to increased sales efforts in North and South America, and higher foreign costs as a result of the weakened U.S. dollar, but remained constant as a percentage of sales. In 2003, management incentive accruals increased by $1.7 million from 2002. Selling, general and administrative expenses in 2003 also included $1.8 million of non-cash expense related to stock-based employee compensation compared to $0 in 2002. This expense represents the charge recorded relating to the existing book value stock option plan accounted for in accordance with EITF Issue No. 87-23. In addition, AIP expenses pursuant to the Management Services Agreement were $3.2 million in 2003 as compared with $1.6 million in 2002 due to increased interest expense on unpaid management fees and out-of-pocket expenses. We incurred a loss of $626,000 on the sale of fixed assets in 2003 compared to a loss of $655,000 in 2002.

Research and Development Expenses

        Research and development expenses for 2003 were $4.6 million compared with $6.5 million for 2002. The decrease was primarily due to the completion in 2002 of several major product improvement projects.

Amortization of Intangible Assets

        Amortization of intangible assets, consisting of engineering drawings, bill of material listings and software, for 2003 and 2002 was $1.6 million and $1.6 million respectively.

Operating Earnings

        Operating earnings for 2003 were $20.5 million, or 6.1% of sales, compared with $15.7 million, or 5.4% of sales, for 2002. This improvement was due to the factors discussed above.

Interest Expense

        Interest expense for 2003 was $17.7 million compared with $18.7 million for 2002. The decrease in interest expense in 2003 was primarily due to reduced borrowings and declining interest rates. Included in interest expense for 2003 and 2002 was $14.6 million related to the Senior Notes, as described further in "Liquidity and Capital Resources—Financing Cash Flows" below. Holdings deferred receipt of interest accrued on these Senior Notes in 2003 and 2002.

Other Income and Expense—Net

        Other income and expense—net was $856,000 of expense and $2.8 million of expense for 2003 and 2002, respectively. Debt issuance cost amortization was $1.2 million and $3.1 million for 2003 and 2002, respectively. The amount for 2002 includes costs related to our existing senior secured credit facility entered into on March 7, 2002 as described further in "Liquidity and Capital Resources—Financing Cash Flows" below. These costs were amortized in their entirety over the

37

period ending January 2, 2003, the date that the initial term of our existing senior secured credit facility expired.

Income Taxes

        Income tax expense for 2003 and 2002 consists primarily of foreign taxes at applicable statutory rates. As of December 31, 2003, we had approximately $41.4 million of federal net operating loss carryforwards that expire in the years 2005 through 2021 to offset against future federal taxable income.

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

Sales

        Sales for 2002 were $289.6 million compared with $290.6 million for 2001. Sales of aftermarket parts and services for 2002 were $242.0 million, which was an increase of 7.1% from $226.0 million in 2001. Machine sales for 2002 were $47.6 million, a decrease of 26.3% from $64.6 million in 2001. Commodity prices remained weak in both 2002 and 2001. In 2001, we recognized sales on three small draglines sold into India. A strong United States dollar reduced sales by approximately $2.3 million in 2002 as compared to 2001, see "Foreign Currency Fluctuations" below.

Gross Profit

        Gross profit for 2002 was $56.1 million or 19.4% of sales compared with $46.8 million or 16.1% of sales for 2001, primarily due to increased sales of aftermarket parts and services and improved margins on those sales. Also included in gross profit for 2002 and 2001 was $5.1 million and $5.2 million, respectively, of additional depreciation expense as a result of purchase price allocation to plant and equipment in connection with AIP's acquisition of us. A strong United States dollar reduced gross profit by approximately $779,000 in 2002 as compared to 2001, see "Foreign Currency Fluctuations" below.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses for 2002 were $32.2 million or 11.1% of sales compared to $30.8 million or 10.6% of sales for 2001. In 2002, management incentive accruals and severance expense increased by $1.1 million and $409,000, respectively, from 2001. Expenses pursuant to the Management Services Agreement with AIP were $1.6 million and $1.6 million for 2002 and 2001, respectively. We incurred a loss on sale of fixed assets of $655,000 in 2002 compared to a loss of $750,000 in 2001.

Research and Development Expenses

        Research and development expenses for 2002 were $6.5 million compared with $5.9 million for 2001. The increase was primarily due to certain product improvement projects in 2002.

Amortization of Intangible Assets

        Amortization of intangible assets, consisting of engineering drawings, bill of material listings and software, for 2002 and 2001 was $1.6 million, and $4.3 million respectively. The decrease in 2002 was due to the adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" on January 1, 2002 which discontinued goodwill amortization in 2002, see "Critical Accounting Policies and Estimates" below. Goodwill amortization totaled $2.2 million in 2001.

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Operating Earnings

        Due to the factors discussed above, operating earnings for 2002 were $15.7 million or 5.4% of sales compared with $5.8 million or 2.0% of sales for 2001.

Interest Expense

        Interest expense for 2002 was $18.7 million compared with $20.9 million for 2001. The decrease in interest expense in 2002 was primarily due to reduced borrowings and declining interest rates. Included in interest expense for both 2002 and 2001 was $14.6 million related to the Senior Notes, see "Liquidity and Capital Resources—Financing Cash Flows" below. Holdings deferred the receipt of interest accrued on these Senior Notes in both 2002 and 2001.

Other Income and Expense—Net

        Other income and expense—net was $2.8 million of expense and $8.0 million of income for 2002 and 2001, respectively. Included in the amount for 2001 was income of $8.7 million from the sale of shares we received as a result of the demutualization of The Principal Financial Group. Debt issuance cost amortization was $3.1 million and $1.1 million for 2002 and 2001, respectively. The amount for 2002 includes costs related to our existing senior secured credit facility, as described in "Liquidity and Capital Resources—Financing Cash Flows" below, entered into on March 7, 2002. These costs were amortized in their entirety over the period ending January 2, 2003, the date that the initial term of our existing senior secured credit facility expired.

Income Taxes

        Income tax expense for 2002 and 2001 consisted primarily of foreign taxes at applicable statutory rates. As of December 31, 2002, we had approximately $55.1 million of federal net operating loss carryforwards that expire between 2005 and 2021 to offset against future federal taxable income.

Foreign Currency Fluctuations

        The following table summarizes the approximate effect of changes in foreign currency exchange rates on our sales, gross profit and operating earnings for the years ended December 31, 2001, 2002 and 2003 and the three months ended March 31, 2003 and 2004, in each case compared to the prior year:

									Three Months Ended March 31,
	Years Ended December 31,
Dollars in thousands
	2001			2002			2003		2003		2004
Increase (decrease) in sales	$	(11,004	)	$	(2,299	)	$	17,134	$	2,079	$	4,215
Increase (decrease) in gross profit		(1,977	)		(779	)		3,307		305		713
Increase (decrease) in operating earnings		(218	)		(381	)		1,434		75		53

EBITDA

        Earnings before interest, taxes, depreciation and amortization, or EBITDA, for the years ended December 31, 2001, 2002 and 2003 and the three months ended March 31, 2003 and 2004 was $30.2 million, $28.1 million, $33.1 million, $7.3 million and $7.0 million, respectively. EBITDA is presented (i) because we use EBITDA to measure our liquidity and financial performance and (ii) because we believe EBITDA is frequently used by securities analysts, investors and other interested parties in evaluating the performance and enterprise value of companies in general, and

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in evaluating the liquidity of companies with significant debt service obligations and their ability to service their indebtedness. The EBITDA calculation is not an alternative to operating earnings under generally accepted accounting principles, or GAAP, as an indicator of operating performance or of cash flows as a measure of liquidity. The following table reconciles Net loss as shown in the Consolidated Statements of Operations to EBITDA and reconciles EBITDA to Net cash provided by (used in) operating activities as shown in the Consolidated Statements of Cash Flows:

										Three Months Ended March 31,
	Years Ended December 31,
Dollars in thousands
	2001			2002			2003			2003			2004
Net loss	$	(10,463	)	$	(10,786	)	$	(3,581	)	$	(1,332	)	$	(2,015	)
Interest income		(252	)		(243	)		(322	)		(27	)		(65	)
Interest expense		20,885			18,672			17,687			4,523			4,125
Income taxes		3,410			5,047			5,583			806			1,380
Depreciation		11,240			10,666			10,831			2,672			2,761
Amortization(1)		5,414			4,748			2,888			667			822
EBITDA(2)(3)(4)		30,234			28,104			33,086			7,309			7,008
Changes in assets and liabilities		454			4,422			10,382			(2,142	)		(4,269	)
Non-cash stock compensation expense(5)		—			—			1,792			—			4,148
Loss on sale of fixed assets		750			655			626			57			8
Gain on sale of the shares received in demutualization of The Principal Financial Group		(8,704	)		—			—			—			—
Interest income		252			243			322			27			65
Interest expense		(20,885	)		(18,672	)		(17,687	)		(4,523	)		(4,125	)
Income tax expense		(3,410	)		(5,047	)		(5,583	)		(806	)		(1,380	)
Net cash provided by (used in) operating activities	$	(1,309	)	$	9,705		$	22,938		$	(78	)	$	1,455
Net cash provided by (used in) investing activities	$	2,107		$	3,816		$	(3,303	)	$	(302	)	$	(701	)
Net cash used in financing activities	$	(92	)	$	(16,803	)	$	(18,990	)	$	1,279		$	(2,404	)

(1)

Includes amortization of intangible assets and debt issuance costs.

(2)

EBITDA for the year ended December 31, 2001 includes $8.7 million of income from the sale of shares we received as a result of the demutualization of The Principal Financial Group.

(3)

EBITDA for the years ended December 31, 2001, 2002 and 2003 and the three months ended March 31, 2003 and 2004 was reduced by restructuring charges of $899,000, $1.3 million, $571,000, $127,000 and $54,000, respectively, primarily related to severance payments and related matters.

(4)

This calculation varies from the calculation in our existing senior secured credit facility.

(5)

Non-cash stock compensation expense represents the charge recorded relating to our existing book value stock option plan accounted for in accordance with EITF Issue No. 87-23.

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Liquidity and Capital Resources

Cash Requirements

        During 2004, we anticipate strong cash flows from operations due to continued strength in aftermarket parts sales as well as increased demand for new machines. In expanding markets, customers are contractually obligated to make progress payments under purchase contracts for machine orders. As a result, we do not anticipate significant outside financing requirements to fund production of these machines and do not believe that new machine sales will have a material negative effect on our liquidity. If additional borrowings are necessary during 2004, we believe we have sufficient capacity under our current or new senior secured credit facility.

        The terms of our existing senior secured credit agreement limit capital expenditures for 2004 to $4.8 million. We believe that this limitation will not hinder our ability to make appropriate capital expenditures. We believe cash flows from operating activities will be sufficient to fund capital expenditures.

        The following table summarizes our contractual obligations as of December 31, 2003:

Dollars in thousands	Total		1 Year or Less		2-3 Years		4-5 Years		Thereafter
Long-term debt	$	154,349	$	376	$	739	$	150,425	$	2,809
Short-term obligations		37,420		37,420		—		—		—
Purchase obligations(1)		1,723		1,396		327		—		—
Operating leases and rental and service agreements		31,172		5,897		6,361		2,938		15,976
Total	$	224,664	$	45,089	$	7,427	$	153,363	$	18,785

(1)

Obligations related to purchase orders entered into in the ordinary course of business are excluded from the above table. Any amounts for which we are liable for goods or services received under purchase orders are reflected in the Consolidated Balance Sheet as accounts payable and accrued expenses.

        At March 31, 2004 and December 31, 2003, there were $9.0 million and $7.7 million, respectively, of standby letters of credit outstanding under all our bank facilities.

        Our long-term liabilities consist of warranty and product liability accruals, pension and postretirement benefit accruals and management service accruals. In 2004, we expect to contribute $4.9 million to our pension plans and $1.7 million for the payment of benefits from our postretirement benefit plan. As of December 31, 2003, we also expect to pay $1.6 million in 2004 under the Management Services Agreement, which will be terminated prior to this offering.

        Payments of warranty and product liability claims are not subject to a definitive estimate by year. However, management does not anticipate cash requirements for warranty and product liability to be materially different than historical funding levels.

        In addition to the obligations noted above, we anticipate cash funding requirements for interest and income taxes of approximately $17 million and $6 million, respectively, during 2004.

        We believe that cash flows from operations will be sufficient to fund the cash requirements outlined above for the next 12 months.

        During 2003 and the first quarter of 2004, we repaid $16.6 million and $2.4 million, respectively, in borrowings under the existing senior secured credit facility. We believe that cash flows from operations will be sufficient to repay additional borrowings under the existing senior secured credit facility in 2004.

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Sources and Uses of Cash

        While we had approximately $4.5 million of cash and cash equivalents as of March 31, 2004, this cash is located at various foreign subsidiaries and is used for working capital purposes. Cash receipts in the United States are applied against the revolving portion of our existing senior secured credit facility as discussed below.

Operating Cash Flows

        During 2003, we generated cash from operating activities of $22.9 million compared to $9.7 million in 2002. During the first quarter of 2004, we generated cash from operating activities of $1.5 million compared to cash used of $78,000 in the first quarter of 2003. The increase in cash flows from operating activities was driven primarily by increased profitability and reduced working capital requirements.

Accounts Receivable

        We recognize revenues on our machine orders using the percentage-of-completion method. Accordingly, accounts receivable are generated when revenue is recognized, which can be before the funds are collected or in some cases, before the customer is billed. As of December 31, 2003 we had $73.1 million of accounts receivable compared to $52.8 million of accounts receivable at December 31, 2002. The increase in accounts receivable was attributable to an increase in revenue recognized in excess of amounts billed on contracts accounted for using the percentage of completion method of $5.1 million. The remaining increase was attributable to the impact of foreign currency translation due to the weakening of the U.S. dollar of $6.3 million and $8.9 million due to increased sales volume in 2003. The decrease in accounts receivable at March 31, 2004 is a result of collection of the receivables billed during the fourth quarter of 2003.

Liabilities to Customers on Uncompleted Contracts and Warranties

        Customers generally make down payments at the time of the order for a new machine as well as progress payments throughout the manufacturing process. In accordance with SOP No. 81-1, these payments are recorded as Liabilities to Customers on Uncompleted Contracts and Warranties which increased from $9.8 million at December 31, 2002 to $19.8 million at December 31, 2003. This increase was due to increased new machine activity for which payments from customers exceed revenues recognized. The decrease of $9.9 million from December 31, 2003 to March 31, 2004 was due to the recognition of revenue on long-term machine contracts for which customer payments were received in 2003.

Financing Cash Flows

Our New Senior Secured Credit Facility

        We have a commitment from, and are currently negotiating the terms of a new senior secured credit facility with, Goldman Sachs Credit Partners L.P. and GMAC Commercial Finance LLC, or GMAC, which we refer to as the new senior secured credit facility. The completion of this offering of Class A common stock is one condition to our entering into the new senior secured credit facility. We intend to use amounts borrowed under our new senior secured credit facility, along with the net proceeds of this offering, to redeem our Senior Notes, to retire our existing senior secured credit facility, to pay deferred interest due on the Senior Notes held by Holdings and to pay deferred fees and other amounts due pursuant to the Management Services Agreement with AIP, which will be terminated prior to this offering. Although the specific terms of the new senior secured credit facility are still being negotiated, we expect that the new senior secured credit facility will provide us with a senior secured term loan of $100 million and a senior secured revolving credit facility of up to

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$50 million. Borrowings under the revolving portion of the new senior secured credit facility are expected to be limited by a borrowing base formula taking into account the value of our receivables and inventory. We expect that the new senior secured credit facility will contain covenants limiting the discretion of management with respect to key business matters and will place significant restrictions on, among other things, our ability to incur additional indebtedness, create liens or other encumbrances, make certain payments or investments, loans and guarantees, and sell or otherwise dispose of assets and merge or consolidate with another entity. We expect that substantially all of our domestic assets and the receivables and inventory of our Canadian subsidiary will be pledged as collateral under the new senior secured credit facility. In addition, we anticipate that the outstanding capital stock of our domestic subsidiaries as well as the majority of the capital stock of our foreign subsidiaries will be pledged as collateral.

Our Existing Senior Secured Credit Facility; Senior Notes

        Our primary source of financing is a senior secured credit facility with GMAC, which we refer to as the existing senior secured credit facility, which as of March 31, 2004 provides us with a $73.0 million senior secured credit facility and expires on January 8, 2005. Substantially all of our domestic assets and the receivables and inventory of our Canadian subsidiary are pledged as collateral under the existing senior secured credit facility. In addition, all of our outstanding capital stock and the outstanding capital stock of our domestic subsidiaries as well as 65% of the capital stock of our foreign subsidiaries are pledged as collateral. We intend to satisfy all of our obligations under our existing senior secured credit facility, and retire the facility, by drawing down on our new senior secured credit facility.

        We currently have outstanding $150 million of our Senior Notes. During 2000, Holdings acquired approximately $75.6 million of our Senior Notes. Holdings agreed to defer the receipt of interest on its Senior Notes through September 15, 2003. Holdings received current interest payable on the Senior Notes held by them on March 15, 2004 from the proceeds of the term loan portion of the existing senior secured credit facility. We intend to retire all $150 million of our Senior Notes, which will require the payment of a call premium, and to pay $23.7 million in deferred interest due on the Senior Notes held by Holdings with the proceeds of this offering and from borrowings under our new senior secured credit facility.

        The terms of the existing senior secured credit facility and the Senior Notes require us to comply with certain covenants. We are in compliance with these covenants as of March 31, 2004. While certain of these covenants limit our ability to incur additional indebtedness or to pay dividends, among other restrictions, we do not believe that such limitations will impact our financial condition or results of operations in light of the current availability under the existing senior secured credit facility and cash flows to be generated from operations.

Critical Accounting Policies and Estimates

        The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying footnotes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates, and such differences may be material to the financial statements. The process of determining significant estimates is fact specific and takes into account factors such as historical experience, current and expected economic conditions, product mix, and in some cases, actuarial techniques. We evaluate these significant factors as facts and circumstances dictate. Historically, actual results have not differed significantly from those determined using estimates.

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        The following are the accounting policies that most frequently require us to make estimates and judgments and are critical to understanding our financial condition, results of operations and cash flows:

Revenue Recognition—Revenue from long-term sales contracts, such as for the manufacture of our machines, is recognized using the percentage-of-completion method prescribed by SOP No. 81-1 due to the length of time to fully manufacture and assemble our machines. We measure revenue recognized based on the ratio of estimated costs incurred to date in relation to total costs to be incurred. The percentage-of-completion method of accounting for these contracts most accurately reflects the status of these uncompleted contracts in our financial statements and most accurately measures the matching of revenues with expenses. We also have long-term maintenance and repair contracts with customers. Under these contracts, we provide all replacement parts, regular maintenance services and necessary repairs for the excavation equipment at a particular mine with an on-site support team. In addition, some of these contracts call for our personnel to operate the equipment being serviced. The customer is billed monthly and a liability for deferred revenues is recorded if payments received exceed revenues recognized. At the time a loss on a contract becomes known, the amount of the estimated loss is recognized in the consolidated financial statements. Revenue from all other types of sales, primarily sales of aftermarket parts, net of estimated returns and allowances, is recognized in conformity with Staff Accounting Bulletin No. 104, when all of the following circumstances are satisfied: persuasive evidence of an arrangement exists, the price is fixed or determinable, collectibility is reasonably assured and delivery has occurred or services have been rendered. Criteria for revenue recognition is generally met at the time products are shipped, as the terms are FOB shipping point.

        Goodwill and Intangible Assets—We account for goodwill and intangible assets in accordance with Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," or SFAS 142. As a result, goodwill is not subject to amortization, but instead is subject to an evaluation for impairment at least annually by applying a two-step fair-value-based test. Additionally, intangible assets with indefinite lives are also not amortized but are subject to an evaluation for impairment at least annually by applying a lower-of-cost-to-market test. Intangible assets with finite lives continue to be amortized. For goodwill, the fair value of our reporting units exceeds the carrying amounts and an impairment charge is not required. As of December 31, 2003, we carried on our balance sheet $12.4 million of indefinite life intangible assets, which consists of trademarks and trade names. We have also completed an impairment analysis of our indefinite life intangible assets in accordance with the provisions of SFAS 142 and have determined that an impairment charge is not required.

Warranty—Sales of our products generally carry typical manufacturers' warranties, the majority of which cover products for one year, based on terms that are generally accepted in our marketplaces. We record provisions for estimated warranty and other related costs at the time of sale based on historical warranty loss experience and periodically adjust these provisions to reflect actual experience.

Product Liability—We are subject to numerous product liability claims, many of which relate to products no longer manufactured by us or our subsidiaries, and other claims arising in the ordinary course of business. We have insurance covering most of said claims, subject to varying deductibles up to $3 million, and have various limits of liability depending on the insurance policy year in question. We establish product liability reserves for the self-insured portion of any known outstanding matters based on the likelihood of loss and our ability to reasonably estimate such loss. We make estimates based on available information and our best judgment after consultation with appropriate experts. We periodically revise estimates based upon changes to facts or circumstances.

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Pension and Other Postretirement Benefits—We account for pensions under SFAS No. 87, "Employers' Accounting for Pensions" and other postretirement benefits under SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." We have two major defined benefit pension plans which are separately funded and also provide certain health care benefits to employees until age 65 and life insurance benefits for certain eligible retired United States employees. Several statistical and judgmental factors which attempt to anticipate future events are used in calculating the expense and liability related to these plans. These factors include assumptions about the discount rate, expected return on plan assets, rate of future compensation increases and health care cost trend rates, as we determine within certain guidelines. In addition, our actuarial consultants also use subjective factors such as withdrawal and mortality rates to estimate these factors. The actuarial assumptions we use may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates, longer or shorter life spans of participants and changes in actual costs of health care. These differences may result in a significant impact to the amount of pension and other postretirement benefit expenses recorded by us.

        In determining our net periodic cost for pension benefits and for postretirement benefits other than pensions for 2003, our actuary used a 6.75% discount rate and an expected long-term rate of return on plan assets of 9%. The discount rate for 2003 was reduced from 7.25% in 2002 while the expected long-term rate of return on plan assets did not change from 2002. The discount rate and the expected long-term rate of return on plan assets used to develop the net periodic benefit costs referred to above for 2004 are 6.25% and 9%, respectively.

        In selecting an assumed discount rate, we review various corporate bond yields. The 9% expected long-term rate of return on plan assets is based on the average rate of earnings expected on the classes of funds invested or to be invested to provide for the benefits of these plans. This includes considering the trusts' targeted asset allocation for the year and the expected returns likely to be earned over the next 20 years. The assumptions used for the return of each asset class are conservative when compared to long-term historical returns. The table below shows the effect that a 1% increase or decrease in the discount rate and expected rate of return on plan assets would have on our pension and other postretirement benefits obligations and costs:

Dollars in thousands		1-Percentage-Point Increase			1-Percentage-Point Decrease
Change in the discount rate:
	Pension and postretirement benefit obligation	$	(8,261	)	$	9,701
	Net periodic pension and postretirement benefit cost		(541	)		617
Change in expected rate of return on plan assets:
	Net periodic pension cost		(469	)		469

New Accounting Pronouncement

        The Financial Accounting Standards Board, or FASB, staff has issued a FASB Staff Position which defers any accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 and requires additional disclosures pending further consideration of the underlying accounting issues. We provide certain health care benefits only until age 65. Therefore, accounting for the Medicare Prescription Drug, Improvement and Modernization Act of 2003 is not expected to have a material effect on our consolidated financial position, results of operations and cash flows.

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Off Balance Sheet Arrangements

        We do not have any off balance sheet financing arrangements that have or are reasonably likely to have a current or future effect on our financial condition that is material to investors.

Quantitative and Qualitative Information about Market Risk

        Our market risk is impacted by changes in interest rates and foreign currency exchange rates.

Interest Rates

        Our interest rate exposure relates primarily to floating rate debt obligations in the United States. We manage our borrowings under our existing senior secured credit facility through selecting LIBOR-based borrowings or prime-rate based borrowings. Our Senior Notes are at a fixed interest rate. If market conditions warrant, interest rate swaps may be used to adjust interest rate exposures, although none have been used to date.

        At December 31, 2003 and March 31, 2004, a sensitivity analysis was performed for our floating rate debt obligations. Based on these sensitivity analyses, we have determined that a 10% change in our weighted average interest rate at December 31, 2003 and March 31, 2004 would have the effect of changing our interest expense on an annual basis by approximately $200,000 and $180,000, respectively.

Foreign Currency

        We sell all new machines, including those sold directly to foreign customers, and most of our aftermarket parts in United States dollars. A limited amount of aftermarket parts sales are denominated in the local currencies of Australia, Canada, South Africa, Brazil, Chile and the United Kingdom which subjects us to foreign currency risk. Aftermarket sales and a portion of the labor costs associated with such activities are denominated or paid in local currencies. As a result, a relatively strong United States dollar could decrease the United States dollar equivalent of our sales without a corresponding decrease of the United States dollar value of certain related expenses. We utilize some foreign currency derivatives to mitigate foreign exchange risk.

        Currency controls, devaluations, trade restrictions and other disruptions in the currency convertibility and in the market for currency exchange could limit our ability to timely convert sales earned abroad into United States dollars, which could adversely affect our ability to service our United States dollar indebtedness, fund our United States dollar costs and finance capital expenditures and pay dividends on our common stock.

        A 10% change in the United States dollar values of the Australian dollar, Canadian dollar, South African Rand, Brazilian Real, Chilean Peso and British Pound would have had the effect of changing our operating earnings in 2003 by approximately $700,000, and would have had an immaterial impact on our consolidated financial position and cash flows. In 2003 actual changes in foreign currency exchange rates increased the United States dollar value of our operating earnings by approximately $1.4 million.

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BUSINESS

Overview

        We were incorporated in Delaware in 1927 as the successor to a business which began producing excavation machines in 1880. Our machines dug the Panama Canal. After 1987, we began exclusively producing surface mining equipment. On August 21, 1997, we entered into a merger agreement with Holdings (formerly known as American Industrial Partners Acquisition Company) and a wholly-owned subsidiary of Holdings. Pursuant to the merger agreement, Holdings' subsidiary purchased our common stock. The subsidiary was merged with and into us, as the surviving entity on September 26, 1997, at which time we became a wholly-owned subsidiary of Holdings. We concurrently entered into a management services agreement with AIP. In 2000, AIP and its affiliates made a further investment in us through its purchase from third-party investors of approximately $75.6 million of our Senior Notes due 2007.

        We design, manufacture and market draglines, electric mining shovels and rotary blasthole drills used for surface mining and provide the aftermarket replacement parts and service for these machines. There are only two global manufacturers of this large excavation machinery and we believe we have the largest installed base of this equipment in the world and the leading market share in draglines and large rotary blasthole drills. Our products are sold to customers throughout the world in every market where surface mining is conducted with modern methods.

        Surface mining is safer, has lower extraction costs and is growing faster than underground mining. Growth is driven by increased demand for surface mined commodities such as copper (South America), oil sands (Canada) and coal (Australia, South Africa, the Western United States, and increasingly, China and India). We have established a leading position in these important surface mining regions. We believe that coal surface mining in China and India holds significant potential for long-term growth, and in early 2004, we entered into a $57 million contract for a dragline sale to the China market. We believe that the sale of this dragline, the first of its kind sold into China, marks a trend towards the adoption of technologically advanced surface mining methods in China.

        We sell both original equipment manufactured, or OEM, and aftermarket parts and service. OEM machine sales are closely correlated with the strength of commodity markets and maintain and augment our almost $10 billion (calculated by estimated replacement value) installed base, which provides the foundation for our aftermarket activities. Our aftermarket parts and service operations, which are more stable and more profitable than our OEM sales, accounted for approximately 70% of sales over the last ten years. Over that period and throughout commodities cycles, our aftermarket sales have sustained a compound annual growth rate of almost 7%, increasing every year except for one year (1999) in which sales declined 2%. We have a broad and established global presence with a network of 26 sales and service offices located in all countries with major surface mining operations. We manufacture our OEM machines and the majority of aftermarket parts in our facility in South Milwaukee, Wisconsin.

        We concentrate on producing technologically advanced and productive machines that allow our customers to conduct cost-efficient operations. We are the only surface mining manufacturer of alternating current, or AC, drive draglines and electric mining shovels and offer advanced computer control systems which allow technicians at our headquarters to remotely monitor and adjust our machines all around the world via the Internet.

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        The following is a summary of our OEM products:

Product	Primary Use	Description	Price Range	Average Life
Draglines	Remove overburden (earth located above coal or mineral deposit)	Bucket size of 9-220 cubic yards	$10-70 million	40 years
Electric Mining Shovels	Load copper, coal, oil sands, iron ore, other mineral bearing materials, overburden and rock into trucks	Hoisting capability up to 120 tons Dipper capability of 12-80 cubic yards	$2-15 million Most popular model: $9 million	15 years
Rotary Blasthole Drills	Drill holes for placement of explosives in copper, coal and diamond mining applications	Diameter size of 6.0-17.5 inches	$0.6-3 million Most popular model: $2.5 million	15 years

        The following charts provide a breakdown of our sales by commodity, region and product line:

Percentage of OEM Sales by Commodity(1)	Percentage of Total Sales by Region(1)	Percentage of Total Sales by Product Line(2)

(1)

Year ended December 31, 2003.

(2)

Ten years ended December 31, 2003.

Our Industry

        The equipment we manufacture and service is primarily used to mine copper, coal, oil sands and iron ore. Growth in demand for these commodities is a function of, among other things, economic activity, population increases and continuing improvements in standards of living in many areas of the world. While our aftermarket parts and service sales have grown consistently, mine operators tend to purchase OEM equipment when they anticipate sustained strength in the commodities markets. Prices for copper, coal, oil and iron ore have risen in recent months. For example, as of May 31, 2004, the price of copper was quoted at $1.28/lb, a 68% increase over the prior year price of $0.76/lb. Factors that could support sustained demand for these key commodities include continued economic growth in China, India and the developing world and renewed economic strength in the developing world. The following charts illustrate that over the last ten years shipments of our OEM machines, in this case electric mining shovels and rotary blasthole

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drills, have tended to move with commodity prices, in this case copper, while our aftermarket sales have consistently grown regardless of commodity prices:

Electric Mining Shovel and Rotary Blasthole Drill Shipments vs. Copper Prices(1)(2)(3)	Aftermarket Sales vs. Copper Prices(2)(3)

(1)

Shipments include units of various sizes and capacities.

(2)

Shipments and sales from and after August 1997 include the results of The Marion Power Shovel Company, which we acquired at such time.

(3)

Source for copper prices: Global Insight—DRI.

(4)

Shovel and drill units in backlog at May 31, 2004, all of which are under contract for delivery during 2004.

(5)

As of May 31, 2004.

        The following table shows certain commodity prices as of May 31, 2004, March 31, 2004 and as of December 31, 2001, 2002 and 2003:

	December 31,						March 31,		May 31,
	2001		2002		2003		2004		2004
Copper $/lb.(1)	$	0.66	$	0.70	$	1.05	$	1.39	$	1.28
Japanese coking coal $/tonne(2)(3)	$	42.23	$	40.97	$	42.97	$	52.87		N/A(4)
Asian steam coal marker $/tonne(5)(3)	$	31.46	$	31.22	$	54.82	$	72.17	$	74.54
Heavy oil $/barrel(6)(3)	$	8.57	$	19.63	$	18.39	$	21.83	$	24.01
South American Iron ore $/tonne(7)(3)	$	30.03	$	29.31	$	31.95	$	37.90	$	37.90

(1)

Source: London Metal Exchange.

(2)

Source: The Institute for Energy Economics, Japan.

(3)

The price for this commodity is not determinable by reference to a commodity exchange. The referenced source provides indicative contract prices which we believe are representative of prevailing price trends.

(4)

As of the date of this prospectus, this information was not available. The indicative contract price as of April 30, 2004 was $64.79.

(5)

Source: McCloskey Coal News.

(6)

Source: Sproule Associates, Ltd. The prices quoted are monthly average contract prices for Hardisty (Canada) Heavy Crude Oil and were converted from Canadian to United States dollars based on the average prevailing exchange rate for the applicable month.

(7)

Source: Skillings Mining Review.

Commodities Markets Served

        Our equipment is primarily used by large multinational companies engaged in surface mining for a variety of commodities. Surface mining equipment for copper, coal, oil sands and iron ore operations have accounted for the largest percentage of industry demand. Copper and oil sands mining operations have accounted for an increasing share of our sales of OEM machines and aftermarket parts and services, and these sectors are expected to continue to grow.

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        Copper.    Copper is a basic material used in residential and commercial construction, electrical equipment, transportation, industrial machinery and consumer durable goods. According to the Copper Development Association, on average each Western single-family home contains approximately 400 pounds of copper and each automobile contains approximately 50 pounds of copper. Copper is predominantly surface mined. Demand for copper is being driven by demand for copper in the developed world and accelerating economic growth in the developing world. Developing world demand is compounded because developing markets do not have the advantage of large pools of recycled copper scrap, which historically has accounted for approximately half of United States copper consumption. From 2000 to 2003, Chinese copper consumption grew at double-digit rates, and in 2002, China overtook the United States as the largest consumer of refined copper. According to the International Copper Study Group, or ICSG, in 2003 worldwide mine production of copper was 30 billion pounds and is projected to increase to 32 billion pounds in 2004. In addition, total expansion of annual mine capacity from 2003 to 2007, is expected to be approximately 3.7 billion pounds. The projected expansions exclude additional production that could come from existing capacity at mines that are currently on care and maintenance or temporarily cutback, or swing capacity.

        Coal.    Coal is the world's most abundant low-cost energy source and is a critical element of energy policy. There are two types of coal: steam coal used to generate electricity and coking coal required to produce steel. Demand for coking coal has recently risen in tandem with the increased demand for steel. The largest coal producers are China, the United States, India, Australia, Russia and South Africa. Within the United States, environmental legislation and increases in the prices for natural gas have caused demand for low sulfur surface mined coal to increase. There has been a shift in coal mining activity from high sulfur coal reserves in the midwestern states to low sulfur coal, which is primarily surface mined, in the Powder River Basin area in Wyoming and in Montana. According to the Energy Information Administration, a statistical agency of the United States Department of Energy, or the EIA, in every year since 1974, levels of surface mining in the United States have exceeded levels of underground mining and over the same period have grown more than three times as fast. In 2002 (the most recent year for which data is available), almost twice as much coal was surfaced mined.

        China and India, which together account for 37% of the world's population, have fast-growing economies and limited domestic energy sources other than coal. In China coal is primarily mined underground, but surface mining is growing and in an attempt to support China's growing economy, China is increasingly adopting modern surface mining methods and using western equipment to access its coal reserves. According to the Chinese government, in 2003 China produced approximately 1.7 billion short tons of coal, a 25% increase over 2002. According to the China Coal Industry Association, Chinese coal production is forecasted to grow more than 10% in 2004. Coal is predominately surface mined in India. According to the World Coal Institute, in fiscal 2002 India produced 367 million short tons of coal, and, according to Coal India Limited, demand is expected to be 578 million tons by fiscal 2011.

        Oil Sands.    A geological formation of oil sands exists in the Athabasca region of northern Alberta, Canada. Oil sands are a viscous mixture of sand, bitumen, clay and water with the consistency of cold molasses. The oil sands are believed to contain the equivalent of 300 billion barrels of oil, of which 175 billion has already been established as commercially viable. For reference, according to the EIA's International Energy Annual 2002, the oil reserves of Saudi Arabia contain approximately 260 billion barrels. According to Canadian government sources, Alberta's oil sands currently account for about one-third of Canada's petroleum production, and by 2005, the Alberta Ministry of Energy anticipates that about one-half of Canadian crude oil production and 10% of North American production will come from the oil sands. Surface mining methods account for approximately 65% of current production in the oil sands region. In 1999, we acquired certain

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assets of an Alberta-based Canadian company with extensive experience in the field repair and service of heavy machinery for the surface mining industry. This acquisition enabled us to establish a sales and service infrastructure and further strengthen our position in the oil sands area of Western Canada.

        Iron Ore.    Iron ore is the only source of primary iron used to make steel and is mined in more than 50 countries. Substantially all iron ore is surface mined. In recent years, the five largest producers, accounting for approximately 75% of world production, have been China, Brazil, Australia, Russia and India. The market for iron ore is largely a function of the demand for steel. Steel is used to produce, among other things, automobiles and other motor vehicles, mass transit and rail transport equipment, structural components for building and infrastructure, including bridges, railroads and factories, and industrial parts. According to the U.S. Geological Survey, in 2003 worldwide production of iron ore is estimated to be 1.1 billion metric tons (including agglomerates, concentrates, direct-shipping ore, and by product ore for consumption). Growth is driven by Chinese industrialization as well as additional requirements for steel in the developed and developing world.

        Other Minerals.    Surface mining machines are also used to mine phosphate, bauxite, gold and diamonds.

Customers

        Most of our customers are large multinational corporations with operations in each of the major surface mining markets. In recent years, customers have reduced their operating costs by employing larger, more efficient machines such as those produced by Bucyrus and have become increasingly sophisticated in their use and understanding of technology. Our focus on incorporating advanced technology such as AC drives and advanced controls has increased customer adoption of our product offerings. Further, we believe these developments have contributed to increased demand for our aftermarket parts and service since we are well-equipped to provide the more sophisticated parts, product technical knowledge and service required by customers who use more complex and efficient machines.

        Over the past five years, our customers have conducted their most significant operations in the United States, South America, South Africa, Australia, Canada, China and India. We expect China and India to experience the most growth in surface mining in the future. In the aggregate, customers spent $64.6 million, $47.6 million and $65.5 million on our OEM machines and $226.0 million, $242.0 million and $272.1 million on aftermarket parts and services in 2001, 2002 and 2003, respectively. These amounts are projected to increase in 2004 as OEM machine sales increases are driven by customer expectations of sustained strength in the copper, coal, oil sands and iron ore markets, rapid industrialization in China and other parts of the developing world, demand for minerals in the developed world and the rising cost of non-coal energy sources. Customers' purchases of OEM products may lag behind such increases in commodity prices because of the time needed to acquire the appropriate mining permits and establish the relevant infrastructure. Aftermarket sales are expected to increase as customers continue the trend of utilizing Bucyrus parts and services in a broader range of applications on their installed base of equipment. Our customers use our aftermarket parts and services because our high quality, reliable and durable products and services are well suited to the long productive lives of our OEM machines. However, surface mine operators may find it more economical to buy lower quality and less durable parts from will-fitters for equipment that is near the end of its useful life.

        Our customers operate under a high fixed cost structure. Small savings on the initial purchase of OEM machines are lost if they lead to less efficient machines and greater down time. Furthermore, their operations are often conducted in remote areas and the large capital investment and long lead time associated with the purchase and erection of a machine encourages customers

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to select reliable and efficient machines and to keep these machines in continuous operation for as long as possible. As a result, customers are focused on quality as well as price and expect us to offer comprehensive aftermarket parts and services to increase efficiency and reduce down time.

        We do not consider ourselves to be dependent upon any single customer, although, on an annual basis a single customer may account for a meaningful percentage of sales, particularly new machine sales. In 2001, 2002 and 2003, one customer, BHP Billiton, accounted for approximately 11%, 12%, and 17%, respectively, of our sales. Our top five customers in each of 2001, 2002 and 2003 collectively accounted for approximately 30%, 41% and 43%, respectively, of our sales. This trend reflects the consolidation of the mining industry.

Competitive Dynamics

        Entry Barriers.    The surface mining equipment industry has substantial barriers to entry. Successful participation in the industry requires: (i) access to key technology and know-how essential to manufacture productive and efficient machines; (ii) specialized manufacturing equipment necessary to efficiently produce complex machines and parts; (iii) large capital expenditures required to establish the necessary global sales and service infrastructure; and (iv) brand recognition, which is generally promoted by an active installed base.

        Importance of Technology.    In recent years, customers have increasingly embraced machines which use the most advanced technology to increase productivity and reduce operating costs. Faster and more reliable alternating current, or AC, drive systems, on-board computers which optimize performance and systems that allow for remote monitoring and control of machines comprise some of the available advanced technology on our machines. The industry has also begun to explore the use of automated systems, such as GPS guided drilling and overburden removal operations. We believe that customers that successfully integrate more advanced machines into their mining operations can enjoy a competitive advantage.

        Productivity, Reliability and Service Drive Purchase Decisions.    In our experience, customers base their purchasing decisions primarily on in-service cost which depends on customer assessment of a machine's quality, reliability and the availability of aftermarket service in addition to initial price. Customers prefer to buy machines that are higher in quality and come with the comprehensive suite of aftermarket services we can provide, even if such machines require a larger up front expenditure, because these machines, which have longer productive lives, are integral to the overall productivity of the mines. We believe our lower life cycle costs provide a competitive advantage.

        Relatively Low Labor Overhead.    Labor costs for the surface mining equipment industry represent a relatively low proportion of operating costs. The proximity of raw materials, purchased components, and skilled labor provide a comparative advantage to United States based manufacturing of surface mining equipment.

Our Strengths

        Market Leader in Most Attractive Markets.    We are the only global excavation machinery manufacturer that exclusively focuses on surface mining, which is safer, has lower extraction costs and is growing faster than underground mining. In the United States, coal surface mine production has exceeded coal underground mine production in every year since 1974 and over the same period has grown more than three times faster. Surface mining is primarily employed in the regions with the lowest mineral extraction cost (South America—particularly Brazilian iron ore and Chilean copper), rapid economic development (Chinese and Indian coal) and emerging energy sources (Canadian oil sands). We are the leader in many of these key markets, based on the number of units in our installed base, such as Brazil, Chile and China. We have a widely-recognized brand name and are the market share

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leader in both draglines and large rotary blasthole drills and have the largest overall installed base of surface mining equipment.

        Advanced Technology.    We produce the most advanced surface mining machines available, providing innovative, cost efficient technology and a high degree of reliability to lower customers' operating costs. We are the only manufacturer of AC powered machines used for surface mining. We believe AC powered machines have higher efficiency rates and consume less power than DC powered machines. We believe, based on customer feedback, that our current equipment can be operated with electrical downtime rates, due to failure or maintenance requirements, below 3%. Additionally, in 2003 our warranty expense was less than 1% of sales. We offer advanced computer control systems which maximize performance and allow monitoring, diagnosis of problems and adjustment of machines remotely. These integrated systems, along with our product reliability, allow us to lower our and our customers' maintenance and operating costs.

        Largest Installed Base.    The estimated replacement value of our worldwide installed base is almost $10 billion, which we believe is the largest installed base of surface mining equipment. This is the foundation for our high margin aftermarket parts and service business. Over the past 10 years, in spite of commodity cycles, our aftermarket sales have sustained a ten-year compound annual growth rate of almost 7%, increasing every year over that period except for one year (1999) in which sales declined by approximately 2%. We expect this trend to continue as we believe we currently capture less than half of the total annual aftermarket sales generated by our installed base and that our operating strategies will increase our share. In addition, we have the opportunity to generate incremental, high margin aftermarket sales by upgrading machines in our installed base with our state of the art technology available on our newer OEM machines.

        The following map provides, as of December 31, 2003, a geographic breakdown of the number of Bucyrus machines deployed worldwide which comprise our installed base.

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        Significant Backlog and Aftermarket Sales Generate Predictable Cash Flows.    Long manufacturing lead times, long-term maintenance and repair contracts and consistent aftermarket sales provide a high degree of predictability on future sales and cash flows. Our backlog at December 31, 2003 was $233.6 million, $122.3 million of which is expected to be recognized in 2004. This is a 29% increase over the next 12 months backlog at December 31, 2002 and represents 36% of total 2003 sales. Backlog at March 31, 2004 increased to $284.0 million. Further recent orders increased backlog at May 31, 2004 to $284.3 million, $160.8 million of which was expected to be realized within 12 months of such date. This represents a 32% increase over next twelve months backlog at December 31, 2003.

        Strong Management Team.    Since our current management team, which has an average of 22 years of experience in the industry, was formed in 2000, they have successfully improved product performance, grown sales and market share and improved our cost structure during a period of prolonged weakness in commodity prices and OEM sales. Management is focused on keeping costs low even during periods of increasing OEM sales. Our senior management will own approximately 3% of our common stock outstanding after this offering and will have options to purchase 688,800 additional shares of our Class A Common Stock.

Our Strategy

        Capture Aftermarket Parts and Service Opportunity.    We believe that we currently capture less than half of the total annual aftermarket sales generated by our installed base. We are pursuing the following strategies to capture an increased share of this profitable opportunity.

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Since assuming leadership in 2000, our current management team has increased our on-time delivery performance for parts from below 60% to above 90%. We have also reduced our lead times for delivery. This higher level of reliable service is critical to our customers.



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Over the last year, we have successfully completed the worldwide installation of our new Baan ERP information technology system in order to systematically and proactively manage information. This IT infrastructure allows us to more accurately predict customers' aftermarket purchase requirements, as we now can collect data regarding our customers' parts requirements based on maintenance standards, their parts inventory, buying patterns and pricing history.



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We have begun the rollout in targeted markets of BucyrusLink, an Internet portal which allows our customers to order aftermarket parts and track orders over the Internet and provides information such as part and kit recommendations based on previous order history and available upgrades and retrofits. This system saves our customers time and money and encourages incremental aftermarket parts orders. Our goal is to add three to four of our ten largest customers to the system during the next year. We believe our use of ERP, and of complementary technologies such as our BucyrusLink customized website, will translate into increased aftermarket sales. Using this data, we can anticipate and address customer needs more precisely and target our efforts on the sales opportunities revealed by the ERP data.



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In 2003, we began offering a state-of-the-art technology which can be used to remotely monitor, trouble-shoot and adjust new and certain late-model existing machines. This feature can be added to over 40% of the units in our installed base. This technology, unavailable elsewhere in our industry, allows us to track the operating characteristics of machines, such as temperature and vibration, and predict more accurately when replacement parts and service will be necessary.



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We have developed several digital control upgrade packages that can be retrofitted to older draglines and shovels. Since these machines are intended to be used for many years, electrical control upgrades can be an economical means of enabling our customers to

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access newer technologies. Upgrades can enhance operational performance and integrate our new state-of-the-art technology, including remote monitoring and trouble-shooting capabilities.

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In 2003, we began to focus on providing customers with complete aftermarket subassembly systems and installation service in addition to providing individual component aftermarket parts. This bundling of parts and service increases the quality and speed of part replacement for our customers. We believe that this focus has contributed to tangible aftermarket sales improvements.



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We continue to develop alliances with parts suppliers. A key element of these alliances is that the suppliers agree to stock inventory for us so that we can supply our customers with faster delivery of a comprehensive selection of parts. Supplier commitments to carry inventory have increased four-fold since 2000.

        Focus on Growth in Emerging Market Opportunities.    As new opportunities emerge in various mining markets across the world, we focus on being the first to establish ourselves as the main surface mining equipment supplier in these new markets. For example, we were the first global surface mining equipment manufacturer to sell machines into China (coal), Canada (oil sands), South America (copper) and India (coal). All of these markets hold significant long-term potential for growth in surface mining.

        Focus on Providing the Most Innovative and Reliable Products.    We will continue to provide reliable and technologically innovative machines to lower customers' operating costs and improve operating efficiency. We have a long-standing strategic partnership with a United States subsidiary of Siemens A.G., or Siemens, to produce AC drive systems and related technology, which allows us to benefit from their technological capabilities and to share the cost of research and development. We have approximately 100 engineers engaged in product design and technical support. We believe our commitment to producing the highest quality machines with the best available technology will allow us to make our products the highest value alternative in the marketplace.

        Expand Margins Through Continuous Cost Discipline and Technological Innovation.    Since 2000, our management team has successfully reduced our cost structure, increasing gross margins from 14.7% in 2000 to 20.6% in 2003 and reducing combined selling, general and administrative expenses and research and development expenses from 15.8% of sales in 2000 to 14.0% of sales in 2003, materially improving operating margins and lowering our breakeven point. We have also positioned ourselves so that our operating margins will benefit from the increased OEM sales we expect to occur in a strong commodities market. We have achieved these results by reducing head count and implementing flexible work rules, rationalizing service facilities, reducing scrap and rework, increasing tooling utilization and improving freight logistics between facilities. We intend to maintain our focus on cost control as we grow our business. We plan to refine our information technology systems to improve customer service and reduce our transaction costs as well as those of our customers. Our new information platforms allow customers to access engineering data and service protocols, order parts and track orders over the Internet. Other cost reducing technologies allow us to monitor, troubleshoot and adjust machines worldwide without dispatching a technician to the mine site.

OEM Products

        Our line of OEM machines includes draglines, electric mining shovels and rotary blasthole drills.

        Draglines.    Draglines are primarily used in coal mining applications to remove overburden by dragging a large bucket through the overburden and carrying it away. Our draglines weigh from 500 to 7,500 tons, and are typically described in terms of their "bucket size," which can range from nine to 220 cubic yards. We currently offer a full line of models ranging in price from $10 million to over $70 million per dragline. Draglines are the largest and most expensive type of surface mining equipment, but offer customers the lowest cost per ton of material moved. The average life of a dragline is approximately 40 years.

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        Electric Mining Shovels.    Mining shovels are primarily used to load copper, coal, oil sands, iron ore, other mineral-bearing materials, overburden, or rock into trucks. There are two basic types of mining shovels: electric and hydraulic. Electric mining shovels are able to handle a larger load, allowing them to move greater volumes of rock and minerals, while hydraulic shovels are diesel powered, smaller and more maneuverable. An electric mining shovel offers significantly lower cost per ton of mineral mined as compared to a hydraulic shovel. Electric mining shovels are characterized in terms of hoisting capability and dipper capacity. We offer a full line of electric mining shovels, with available hoisting capability of up to 120 tons. Dipper capacities range from 12 to 80 cubic yards. Prices range from approximately $2 million to approximately $15 million per shovel. Our most popular shovels sell for approximately $9 million. Our electric mining shovels have an average life of approximately 15 years.

        Rotary Blasthole Drills.    Many surface mines require breakage or blasting of rock, overburden or ore by explosives. To accomplish this, it is necessary to bore out a pattern of holes into which the explosives are placed. Rotary blasthole drills are used to drill these holes and are usually described in terms of the diameter of the hole they bore. We offer a line of rotary blasthole drills ranging in hole diameter size from 6.0 inches to 17.5 inches and ranging in price from approximately $0.6 million to $3 million per drill, depending on machine size and other variable features. Our most popular drills sell for approximately $2.5 million. The average life of a rotary blasthole drill is approximately 15 years.

Aftermarket Parts and Services

        We have a comprehensive aftermarket business that supplies replacement parts and services for our installed base of operating equipment. Over the life of a machine, customer purchases of aftermarket parts and services generally exceed the original purchase price of the machine. Our aftermarket offerings include engineered replacement parts, maintenance and repair labor, technical advice, refurbishment and relocation of machines, comprehensive structural and mechanical engineering, non-destructive testing, repairs and rebuilds of machine components, product and component upgrades, turnkey erections, equipment operation and complete equipment management under comprehensive, long-term maintenance and repair contracts. We also distribute less sophisticated components which are consumed in the normal course of operating these machines. Our aftermarket business also comprises ancillary operations, including repair services and parts distribution provided by our principal Canadian subsidiary to Canadian customers in the pulp and paper, sawmill, oil and natural gas industries. A substantial portion of our international repair and maintenance services are provided through our global network of wholly-owned foreign subsidiaries and overseas offices operating in Australia, Brazil, Canada, Chile, China, England, India, Peru and South Africa. We also maintain a continuous physical presence at certain customers' domestic and overseas mine sites in certain of these countries as well as in Argentina and Sweden in connection with our maintenance and repair contract operations.

        We realize higher margins on sales of aftermarket parts and services than on sales of OEM machines. Moreover, because these machines tend to operate continuously in all market conditions with expected lives ranging from 15 to 40 years and have predictable parts and maintenance needs, our aftermarket business is inherently more stable and predictable than the market for OEM machines, which is closely correlated with expectations of sustained strength in commodity markets.

        Large mining customers are increasingly outsourcing the skills involved in maintaining large and complex surface mining equipment. We offer comprehensive maintenance and repair contracts to address this trend. Under these contracts, we provide all replacement parts, regular maintenance services and necessary repairs for the excavation equipment at a particular mine with an on-site support team. In addition, some of these contracts call for our personnel to operate the equipment being serviced. Maintenance and repair contracts are beneficial to our customers because they

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promote high levels of equipment reliability and performance, allowing the customer to concentrate on mining production. Maintenance and repair contracts typically have terms of three to five years with provisions for renewal and early termination. New mines in areas such as Argentina, Australia, Canada, Chile and Peru are our primary targets for maintenance and repair contracts because it is difficult and expensive for mining companies to establish the necessary infrastructure for ongoing maintenance and repair in remote regions of these countries.

        Our aftermarket parts and service sales have generally grown consistently over the past ten years. For most of our customers, production continues even during periods of lower commodity prices, maintaining demand for aftermarket parts and services, although will-fitter competition tends to intensify during periods of commodity price weakness. We have improved performance in key areas that motivate customers to purchase our aftermarket parts and services by reducing lead times, increasing on-time delivery and implementing an information technology infrastructure to better serve and market to our customers. We believe our emphasis on quality and technology has further increased customer motivation to use more of our aftermarket parts and services. We believe that our continued focus on on-time delivery, competitive lead times and enhanced information technology systems combined with our comprehensive offerings of quality aftermarket components and installation services and our development of key supplier alliances position us to compete effectively for most aftermarket opportunities.

Information Technology Infrastructure

        In early 2004, we completed the worldwide installation of Baan, our ERP system that was initially installed for our United States operations in August 1999. Our ERP system allows us to rapidly analyze information in real-time on a regional, customer, product-line and commodity basis. Through the ERP system we can monitor numerous functions, including engineering, distribution, inventory and finance. We can collect data regarding our customers' buying patterns and pricing history and deliver this information in real-time to our management to assist in their decision making. Our ERP system also allows us to apply company-wide performance metrics, which we use to evaluate and improve our operations.

        We believe we can utilize our information technology infrastructure to generate new sales, particularly aftermarket sales. Our system allows us to monitor our worldwide inventory, determine when we or our suppliers can deliver parts and track on-time delivery performance, which together enable us to improve the accuracy of our quoted lead times, thereby increasing customer satisfaction and inventory turns. We are developing strategies to increase sales and more effectively compete on price, delivery and available inventory because we can identify success rates on quotations for specific parts and customers and can record and communicate determinations as to the reasons for lost sales. We can ensure consistency and optimize pricing by monitoring pricing trends of individual parts sold worldwide. We are able to use our system to examine data related to our installed base, categorized by commodities, customers, and specific machines, to discern trends and formulate strategies for adding incremental sales. Information on global vendor sourcing and cost will enable us to identify and utilize lower cost sources of supply.

        We have begun the rollout in targeted markets of BucyrusLink, an Internet portal which allows our customers to access a website, customized for their Bucyrus machine fleet, providing them with information such as part and kit recommendations based on their previous order history, maintenance manuals and information regarding service, available machine upgrades and retrofits. Customers can use the system to order aftermarket parts and track orders through this Internet portal. Our goal is to add three to four of our ten largest customers to the system during the next year.

        We also offer advanced computer control systems to customers which monitor machine operating data, allow for operational analyses and optimization and monitor material moved to help prevent overloading. This system is available on all of our new machines and can be added to over

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40% of the units in our installed base. The control systems on the machines transmit this information to a remote base station located in a mine office. This allows for real-time worldwide access by our employees and customers to machine information for machine status tracking and fault resolution. This significantly reduces delay in machine repairs and provides important information on the operation and performance of the machine, allowing technicians to troubleshoot and adjust machines without visiting mine sites.

Marketing, Distribution and Sales

        OEM machines and aftermarket parts and services are primarily sold directly by our personnel both in the United States and in foreign markets. Sales outside the United States are made through our offices located in Australia, Brazil, Canada, Chile, China, England, India, Peru and South Africa and, in some markets, by independent sales representatives.

        Typical payment terms for new equipment require a down payment, and require customers to make progress payments. Lead times for large OEM machines generally vary from four to nine months, but can be two years or more for a dragline. We generally attempt to obtain committed raw materials pricing through arrangements with suppliers for periods of up to a year. Recently, we have incurred raw materials surcharges, and have been able to include terms providing for recovery of these cost increases in contracts entered into in 2004. Sales contracts for machines are predominantly at fixed prices, with escalation clauses in certain cases. Most sales of replacement parts call for prices in effect at the time of order.

Foreign Operations

        Our largest foreign markets are Australia, Canada, Chile, South Africa, China, India and Peru. We employ direct marketing strategies in these markets as well as developing markets such as Indonesia, Jordan, Mauritania and Turkey. A substantial portion of our sales and operating earnings is attributable to operations located outside the United States. Over the past five years, over 85% of our OEM machine sales and approximately 70% of our aftermarket sales have been in international markets, of which the most significant over that five year period have been Australia at 15.8%, Canada at 14.7%, Chile at 14.3% and South Africa at 7.9%. Our foreign sales, consisting of exports from the United States and sales by consolidated foreign subsidiaries, totaled $209.1 million in 2001, $212.7 million in 2002 and $260.4 million in 2003. Approximately $201.9 million, or 88%, of our backlog of firm orders at December 31, 2001, represented orders for export sales compared with $199.2 million, or 81%, at December 31, 2002 and $198.6 million, or 85%, at December 31, 2003 and $255.4 million or 90%, at March 31, 2004.

        New machine sales in foreign markets are supported by our established network of foreign subsidiaries and overseas offices that directly market our products and provide ongoing services and replacement parts for equipment installed abroad. The availability and convenience of the services provided through this worldwide network ensure the efficient operation of Bucyrus equipment by our customers, promote high margin aftermarket sales of parts and services, and give us a sustained local presence to promote new machine orders.

        We sell OEM machines, including those sold directly to foreign customers, and most of our aftermarket parts in United States dollars, with limited aftermarket parts sales denominated in the local currencies of Australia, Canada, South Africa, Brazil and the United Kingdom. Aftermarket services are paid for primarily in local currency, with a natural partial currency hedge through our payment for local labor in local currency. In the aggregate, approximately 70% of our 2003 sales were priced in United States dollars. The value, in United States dollars, of our investments in our foreign subsidiaries and of dividends paid to us by those subsidiaries will be affected by changes in exchange rates. We do not normally enter into significant currency hedges, although we may enter into arrangements to hedge specific non-United States dollar denominated contracts.

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Competition

        Our only global competitor in electric mining shovels and draglines and primary competitor in rotary blasthole drills is the P&H division of Joy Global, Inc., although for certain applications our electric mining shovels may also compete against hydraulic shovels made by other manufacturers. In China and Russia, we also face limited competition from regional and domestic equipment manufacturers; however, such competition is not material to our core markets. Methods of competition are diverse and include price, lead times, operating costs, machine productivity, design and performance, reliability, service, delivery and other commercial factors.

        For most owners of our machines, we are the primary replacement source for highly engineered, integral components. Competition in replacement parts sales consists primarily of independent firms called will-fitters that produce copies of the parts manufactured by us and other original equipment manufacturers. Our principal OEM competitor also participates in this business. These copies are generally sold at lower prices for use on older machines, and are generally acknowledged to be of lower quality than parts produced by the manufacturer of the original equipment. We also face significant competition from manufacturers and distributors in the sale of consumable replacement parts which we do not manufacture, including wire rope, non-specialized parts and less-sophisticated electrical parts, as well as aftermarket services competition from these market participants and local machining and repair shops.

        We have a variety of programs to attract large volume customers for our replacement parts. Although will-fitters engage in significant price competition in parts sales, we possesses clear non-price advantages over will-fitters. Our engineering and manufacturing technology and marketing expertise exceed that of our will-fit competitors, who in may cases are unable to duplicate the exact specifications of Bucyrus parts. Moreover, the use of parts not manufactured by us can void the warranty on a new Bucyrus machine, which generally runs for one year, with certain components under warranty for longer periods.

Raw Materials and Supplies

        We purchase from outside suppliers raw materials, principally structural steel, castings and forgings required for our manufacturing operations, and other items, such as electrical equipment, that are incorporated directly into the end product. Our foreign subsidiaries purchase components and manufacturing services both from local suppliers and from us. Certain additional components are sometimes purchased from suppliers, either to expedite delivery schedules in times of high demand or to reduce costs. Moreover, in countries where local content requirements exist, local subcontractors can occasionally be used to manufacture the required components.

        We obtain all of the AC electrical drive components for our products exclusively from a United States subsidiary of Siemens AG, Siemens Energy & Automation, Inc., or Siemens. Our products incorporate electrical equipment, including AC drive systems and computer hardware and software, which we believe provide our products with an efficiency advantage. We purchase these electrical systems, produced by Siemens, under a contract which has been continuously renewed since 1976. We expect this relationship to continue and the contract to be renewed prior to its expiration date in 2006. The contract provides for Siemens to supply us with electrical systems for our manufactured machinery under specified pricing parameters with exclusivity provisions applying to both parties. The contract also includes limited warranties on parts and services supplied by Siemens. Additionally, we and Siemens have entered into particular contracts or arrangements with respect to the development of joint technology for application to specific projects. We are not dependent upon any other sole source supplier.

        Recently, demand for steel and consolidation in the steel industry have resulted in pronounced price increases for steel. We generally attempt to obtain committed raw materials pricing, through arrangements with our suppliers, for up to a year. Recently, we have incurred raw materials surcharges, and have been able to include terms providing for recovery of these cost increases in

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contracts entered into in 2004. We have done business with a majority of our principal vendors for more than two decades and believe we benefit from good relations with these vendors. Through commercial arrangements, forward pricing and contractual cost pass-throughs, management believes it has minimized exposure to price increases and surcharges for raw materials.

Manufacturing

        The design, engineering and manufacturing of most of our machines and manufactured aftermarket parts is done at our 1,048,000 square foot South Milwaukee, Wisconsin complex. We use large, heavy manufacturing equipment in the machining, welding and assembly of OEM machines and manufactured aftermarket parts. Our OEM machines typically consist of up to hundreds of thousands of parts, many of which are specialized. For example, our model 495 B electric shovel has 133,127 parts, while our 2570 WS dragline has 587,155 parts. OEM machines and the majority of aftermarket parts are customized based on customer requirements. The size and weight of these OEM machines dictate that the machines be shipped to the job site in sub-assembled units where they are assembled for operation with the assistance of our technicians. Planning and on-site coordination of machine assembly is a critical component of our service to our customers. To reduce lead times and ensure that customer delivery requirements are met, we maintain an inventory of sub-assembled units and parts to meet forecasted customer demands. As of March 31, 2004, we had $121.3 million of inventory.

Backlog

        The backlog of firm orders was $245.7 million at December 31, 2002, $233.6 million at December 31, 2003 and $284.0 million at March 31, 2004. Approximately 52% of the backlog at December 31, 2003 is expected to be filled during 2004.

Patents, Licenses and Franchises

        We have numerous United States and foreign patents, patent applications and patent licensing agreements. We do not consider our business to be materially dependent upon any patent, patent application, patent license agreement or group thereof.

Research and Development

        Expenditure for design and development of new products and improvements of existing mining machinery products, including overhead, aggregated $5.9 million in 2001, $6.5 million in 2002 and $4.6 million in 2003. Product development expense was reduced from 2003 as compared to 2002 primarily due to the completion in 2002 of several major product improvement projects. All engineering and product development costs are charged to selling, general and administrative expenses as incurred.

Employees

        At March 31, 2004, we employed approximately 1,650 persons, approximately 730 of whom are located outside the United States. Approximately 300 of our United States employees are unionized. Our non-United States workforce is not unionized, with the exception of a portion of the staff of certain Chilean operations. We consider our relationship with our unionized and non-unionized workers to be good. The four-year contract with the United Steel Workers of America representing hourly workers at the South Milwaukee, Wisconsin facility and the three-year contract with the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America representing hourly workers at the Memphis, Tennessee facility expire in April 2005 and September 2005, respectively.

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Properties

        Our principal manufacturing plant in the United States is located in our complex in South Milwaukee, Wisconsin. This plant comprises several buildings totaling 1,048,000 square feet of floor space. A portion of this facility houses our corporate headquarters and research and development facilities. The major buildings at this facility are constructed principally of structural steel, concrete and brick and have sprinkler systems and other devices for protection against fire. The buildings and equipment therein, which include specialized machine tools and equipment for fabrication and assembly of our mining machinery, including draglines, electric mining shovels and rotary blasthole drills, are well-maintained, in good condition and in regular use. On January 4, 2002, we completed a sale and leaseback transaction for a portion of the land and buildings in the South Milwaukee complex including a 927,685 square foot manufacturing and office complex. The term of the lease is twenty years with the option to renew the lease for five five-year terms at our option. Annual rent under the lease is $1.1 million in years 1-15, with rent in successive years subject to escalation as provided in the lease. The lease is a net lease under which we are responsible for associated taxes, utilities and insurance. We continue to own the remainder of the land and buildings in South Milwaukee.

        We lease a facility in Memphis, Tennessee, which has approximately 90,000 square feet of floor space and is used as a central parts warehouse. The current lease has been renewed for three years commencing July 2004.

        Bucyrus Canada Limited, a wholly-owned subsidiary, owns a facility in Edmonton, Alberta, Canada. An outstanding mortgage loan in the amount of approximately C$3.5 million at Bucyrus Canada Limited is collateralized by this facility.

        We own or lease administrative and sales offices in Australia, Brazil, Canada, Chile, China, England, India, Peru and South Africa and have repair facilities in Brazil, Canada and Chile.

        Substantially all of our domestic assets and the capital stock of our foreign subsidiaries are pledged to secure our obligations under our existing senior secured credit facility, and we expect to enter into similar security arrangements under our new senior secured credit facility.

        Our domestic and foreign properties, taken together with our ability to purchase requirements from outside vendors and perform work at customer sites, appropriately meet our needs.

Legal Proceedings

Product Liability

        We are normally subject to numerous product liability claims, many of which relate to products no longer manufactured by us or our subsidiaries, and other claims arising in the ordinary course of business in federal and state courts. Such claims are generally related to property damage and to personal injury. Our products are operated by us and our customers' employees and independent contractors at various work sites in the United States and abroad. In the United States, workers' claims against employers related to workplace injuries are generally limited by state workers' compensation statutes, but such limitations do not apply to equipment suppliers. In addition, independent contractors may not be subject to state workers' compensation regimes. We have insurance covering most of said claims, subject to varying deductibles of up to $3 million, and have various limits of liability depending on the insurance policy year in question. It is the view of management that the final resolution of said claims and other similar claims which are likely to arise in the future will not individually or in the aggregate have a material effect on our financial position, results of operations or cash flows, although no assurance to that effect can be given.

        In July 2002, an adverse judgment was issued against us in a case styled Underwood, et ux. v. B-E Holdings, Inc. in the United States District Court for the Western District of New York. The plaintiff asserted that we were responsible for personal injuries suffered in a workplace accident. The jury in the case awarded the plaintiff over $7.1 million in damages, and apportioned 35% of the

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judgment to us, with 45% apportioned to the plaintiff's employer and the remainder to the plaintiff. We have fully reserved for our uninsured share of the judgment.

Suits Alleging Exposure to Asbestos and Other Substances

        We have been named as a co-defendant as of May 31, 2004 in approximately 292 personal injury liability cases alleging damages due to exposure to asbestos and other substances, involving approximately 1,480 plaintiffs. The cases are pending in courts in nine states, including California (Los Angeles County, San Francisco County); Illinois (Madison County); Louisiana (U.S. District Court, Middle District of Louisiana; now moved to the U.S. District Court, Eastern District of Pennsylvania); Minnesota (Itasca County); New York (Oneida County, Ontario County, New York County, St. Lawrence County); Oregon (Multnomah County); Texas (Freestone County, Harrison County, Rusk County, Titus County); Utah (Salt Lake County) and Washington (King County). In all of these cases, insurance carriers have accepted or are expected to accept defense. These cases are in various pre-trial stages. We do not believe that costs associated with these matters will have a material effect on our financial position, results of operations or cash flows, although no assurance to that effect can be given.

Other

        One of our wholly-owned subsidiaries is a defendant in a suit pending in the United States District Court for the Western District of Pennsylvania, brought on June 15, 2002, relating to an incident in which a dragline operated by an employee of one of our subsidiaries tipped over. The customer has sued an unaffiliated third party on a negligence theory for property damages and business interruption losses in a range of approximately $25 million to $27 million. The unrelated third party has brought a third-party over action against our subsidiary. Our insurance carriers are defending the claim, but have not conceded that the relevant policies cover the claim. At this time discovery is ongoing and it is not possible to evaluate the outcome of the claim nor the range of potential loss, if any.

        We are also involved in various other litigation in the United States and abroad arising in the normal course of business, including arbitration proceedings with unions representing our employees, as well as individual employees, and proceedings before and involving the National Labor Relations Board. It is the view of management that our recovery or liability, if any, under pending litigation is not expected to have a material effect on our financial position, results of operations, or cash flows, although no assurance to that effect can be given.

        Prior to 1985, one of our wholly-owned, indirect subsidiaries, Equipment Assurance Limited, or EAL, provided comprehensive general liability insurance coverage for affiliated corporations, including its operating company parent, and invested in risk pools as part of its reinsurance activities. In 1987, we divested the operating company parent, but retained EAL. The subsidiary issued policies for occurrences during the years 1974 to 1984. The successor in interest to the operating parent of EAL has tendered to EAL for insurance coverage related to the defense and indemnity of a civil action by the San Gabriel Valley Water Company of El Monte, California for costs to remediate alleged water contamination and to buy replacement water. At this stage we are unable to assess the merits of the tender or the likely costs, if any, of resolution of the matter.

        It is possible that other claims could be asserted in the future with respect to such policies or risk pools. While we do not believe that liability under such policies or risk pools will result in material costs, no assurance to this effect can be provided.

        A wholly-owned Australian subsidiary is a defendant in a suit pending in the Supreme Court of Queensland in Australia, brought on May 5, 2002, relating to a contractual claim. The plaintiff, pursuant to a contract with our subsidiary, agreed to erect a dragline sold by us to a customer for use at its mine site. The plaintiff asserts various contractual claims related to breach of contract damages and other remedies for approximately Aus $3.6 million related to its claim that it is owed

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amounts for services rendered under the contract. Our subsidiary has asserted counterclaims against the plaintiff in connection with certain aspects of the work performed. We have established a reserve for our estimate of the resolution of this matter.

Environmental and Related Matters

        Our operations and properties are subject to a broad range of federal, state, local and foreign laws and regulations relating to environmental matters, including laws and regulations governing discharges into the air and water, the handling and disposal of solid and hazardous substances and wastes, and the remediation of contamination associated with releases of hazardous substances at our facilities and at off-site disposal locations. These laws are complex, change frequently and have tended to become more stringent over time. Future events, such as required compliance with more stringent laws or regulations, more vigorous enforcement policies of regulatory agencies or stricter or different interpretations of existing laws, could require additional expenditures by us, which may be material.

        Environmental problems have not interfered in any material respect with our manufacturing operations to date. We believe that our compliance with statutory requirements respecting environmental quality will not materially affect our capital expenditures, earnings or competitive position. We have an ongoing program to address environmental compliance.

        Certain environmental laws, such as CERCLA, provide for strict, joint and several liability for investigation and remediation of spills and other releases of hazardous substances. Such laws may apply to conditions at properties currently or formerly owned or operated by an entity or its predecessors, as well as to conditions at properties at which wastes or other contamination attributable to an entity or its predecessors come to be located.

        We are one of 53 entities named by the United States Environmental Protection Agency, or EPA, as potentially responsible parties, or PRP, with regard to the Millcreek dumpsite, located in Erie County, Pennsylvania, which is on the National Priorities List of sites for cleanup under CERCLA. We were named a PRP under an administrative order issued in March 1992 as a result of allegations that we disposed of foundry sand at the site in the 1970's. Both the United States government and the Commonwealth of Pennsylvania initiated actions to recover cleanup costs. We have settled both actions with respect to our liability for past costs. In addition, 37 PRPs, including us, received administrative orders issued by the EPA pursuant to Section 106(a) of CERCLA to perform site capping and flood control remediation at the Millcreek site. We were one of eighteen parties responsible for a share of the cost of such work, and have shared such cost per capita to date; however, such cost may be subject to reallocation. In 2002, final remedial work in the form of installation of a municipal golf course as cover was completed and the cost thereof was paid. The EPA has certified completion and its approval thereof. The former remediation contractor, IT Corporation, commenced suit against the Millcreek Dumpsite Group, an unincorporated association including us and other cooperating Millcreek PRPs, or the Group for breach of contract claims in an amount in excess of $1 million. The Group is defending and negotiating settlement of the claim. At March 31, 2004, we do not believe that our remaining potential liability in connection with this site will have a material effect on our financial position, results of operations or cash flows, although no assurance can be given to that effect.

        We have also been named as a PRP in two additional CERCLA matters. The EPA named us as a PRP with respect to the clean up of the Chemical Recovery Systems, Inc., or CRS, site in Elyria, Ohio. On December 20, 2003, EPA offered us a de minimis settlement in the amount of $6,800 to resolve our liabilities under CERCLA Sections 106, 107 and 113. We accepted EPA's settlement offer and are awaiting notification from EPA that the settlement is effective. As of March 31, 2004, we do not believe that our remaining potential liability in connection with this site will have a material effect on our financial position, results of operations or cash flows, although no assurance can be given to that effect.

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        EPA also named us as a PRP in the Tremont City, Clark County, Ohio, landfill matter pursuant to an administrative order issued in July 2001. The EPA identified us as a PRP based upon past operations of The Marion Power Shovel Company, the assets of which we acquired in 1997 pursuant to an asset purchase and sale agreement. We responded that we have not operated The Marion Power Shovel Company, that the periods of operation of the Tremont City landfill expired many years prior to 1997 and that, accordingly, we have none of the information requested by the EPA. We gave notice of this matter and potential claim to Global Industrial Technologies, Inc., or Global, under indemnification provisions of the Asset Purchase and Sale Agreement. In 2002, we received notice that Global had filed Chapter 11 under federal bankruptcy laws. We have filed timely claims in that proceeding. Attorneys for Global have participated in a group of potential responsible parties in connection with EPA's investigation of the Tremont City landfill. We have not had further contact from EPA concerning this matter. Although we have not regarded, and do not regard, this site as presenting a material contingent liability, there can be no assurances to that effect because the EPA has not responded to us nor has the EPA withdrawn its identification of us as a PRP.

        On March 24, 2003, EPA sent a Request for Information pursuant to CERCLA Section 104 and RCRA Section 3007 to Minserco, Inc., or Minserco, one of our wholly-owned subsidiaries, seeking information concerning Minserco's involvement with the Sadler Drum site in Mulberry, Polk County, Florida. Minserco responded that it had purchased drums from Sadler Drum, but did not send any drums to the site or return to Sadler Drum any drums it purchased. EPA has not responded to Minserco's information. We are aware that EPA has spent approximately $600,000 for environmental cleanup at the Sadler Drum site, but has not received any indication whether PRPs will be asked to investigate or cleanup.

        In December 1990, the Wisconsin Department of Natural Resources, or DNR, conducted a pre-remedial screening site inspection on property owned by us located at 1100 Milwaukee Avenue in South Milwaukee, Wisconsin. Approximately 35 acres of this site were allegedly used as a landfill by us until approximately 1983. We disposed of certain manufacturing wastes at the site, primarily foundry sand. The DNR's final site screening report, dated April 16, 1993, summarized the results of additional investigation. A DNR Decision Memo, dated July 21, 1991, which was based upon the testing results contained in the final site screening report, recommended additional groundwater, surface water, sediment and soil sampling. To date, we are not aware of any initiative by the DNR to require any further action with respect to this site. Consequently, we have not regarded, and do not regard, this site as presenting a material contingent liability. There can be no assurance, however, that additional investigation by the DNR will not be conducted with respect to this site at some later date or that this site will not in the future require removal or remedial actions to be performed by us, the costs of which could be material, depending on the circumstances.

        We have previously been named as a potentially responsible party under CERCLA and analogous state laws at other sites throughout the United States. We believe we have determined our cleanup liabilities with respect to these sites and do not believe that any such remaining liabilities, if any, either individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations or cash flows. We cannot, however, guarantee that we will not incur additional liabilities with respect to these sites in the future, the costs of which could be material, nor can we guarantee that we will not incur cleanup liability in the future with respect to sites formerly or presently owned or operated by us, or with respect to off-site disposal locations, the costs of which could be material.

        Over the past three years, expenditures for ongoing compliance, remediation, monitoring and non-recurring clean-up have been immaterial. While no assurance can be given, we believe that expenditures for compliance and remediation will not have a material effect on our future capital expenditures, results of operations or competitive position.

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Regulations Affecting Our Customer Base

        Our customers are engaged in long-term, capital-intensive extractive operations subject to and affected by a variety of environmental, safety, land-use and other regulations. In the United States, federal, state and local authorities regulate mining activities with respect to aspects such as permitting and licensing, air quality, employee safety and health, water pollution, protection of plants and wildlife and land reclamation and restoration. Mining operations may not commence or continue absent federal, state and local government approvals. Approvals may be contingent upon production of costly and time-consuming environmental impact assessments and mitigation measures. The Surface Mining Control and Reclamation Act of 1977, which is administered by the Office of Surface Mining Reclamation and Enforcement, or OSM, requires mine operators to obtain permits from the OSM. Certain key surface mining states have achieved primary control over mine operators within their jurisdiction from the OSM in accordance with the Act. Permitting under the Act can take from six months to two years or more, and is subject to public comment. Permits are contingent upon the posting of a bond or other security to assure compliance with land reclamation obligations. The U.S. Clean Water Act of 1972 also imposes costs on extractive operations by imposing permitting requirements contingent upon monitoring, reporting and performance standards related to activities that result in discharges into bodies of water.

        Extractive enterprises in foreign jurisdictions are subject to extensive local regulation. Most key mining jurisdictions subject extractive enterprises to permitting and permit renewal requirements and to royalty assessments. Several key nations place restrictions or assessments on foreign investment. Foreign mining operations may also be subject to safety and environmental regulations that can delay extractive projects or increase associated costs.

        Our customers' operations may also be adversely affected by regulatory regimes concerning surface mined commodities. In particular, regulations affecting fossil fuel emissions, most notably coal emissions, have had a significant impact on the output of the domestic coal industry. Laws and regulations affecting U.S. coal consumption include the Clean Air Act and Clean Air Act Amendments of 1990, and regulatory initiatives under the Act, including the EPA's new source review initiative, 1997 National Ambient Air Quality Standards, 2003 Interstate Air Quality Rule and NOx SIP Call rules. These initiatives and further pending initiatives related to mercury emissions and acid rain have had and could in the future have the effect of reducing the relative desirability of coal as a fuel source for electrical generation facilities. Similar regulatory regimes have been imposed or proposed in foreign countries or may be instituted in the future. Existing emissions and air quality regulations in the United States and elsewhere have shifted coal production to low-sulfur coal, a portion of which, in the United States, is surface mined in the Powder River Basin. Further regulatory initiatives not related to air quality but targeting carbon dioxide emissions, a byproduct of coal consumption, could potentially depress Western coal consumption. The United States and over 160 other nations are signatories to the 1992 Framework Convention on Climate Change, which is intended to limit emissions of greenhouse gases, such as carbon dioxide. In December 1997, in Kyoto, Japan, the signatories to the convention established a binding set of emission targets for developed nations which require reductions in greenhouse gas production. Although the United States has not ratified the emission targets and no comprehensive regulations limiting United States greenhouse gas emissions are in place, these restrictions, whether through ratification of the emission targets or other efforts to stabilize or reduce greenhouse gas emissions, could adversely impact the price of and demand for coal. Further developments in connection with regulations or other limits on carbon dioxide emissions could reduce demand for our customers' output and thus their demand for our products, which would have a material adverse effect on our business.

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MANAGEMENT

Directors and Executive Officers

        The following table sets forth the names and ages, as of July 1, 2004, of our directors and executive officers, as well as the positions and offices held by those persons.

Name	Age	Position
Timothy W. Sullivan	51	President, Chief Executive Officer and Director
Thomas B. Phillips	58	Executive Vice President and Chief Operating Officer
Craig R. Mackus	52	Chief Financial Officer, Controller and Secretary
Frank P. Bruno	68	Vice President—Human Resources
John F. Bosbous	51	Treasurer
Theodore C. Rogers	69	Chairman of the Board of Directors and Director
W. Richard Bingham	68	Director
Ronald A. Crutcher	57	Director
Dino M. Cusumano	29	Director
Robert W. Korthals	71	Director
Gene E. Little	61	Director
Kim A. Marvin	42	Director
Robert L. Purdum	68	Director

Mr. Sullivan became our President and Chief Executive Officer on March 19, 2004 and was previously President and Chief Operating Officer from August 14, 2000 to March 19, 2004. Mr. Sullivan rejoined us on January 17, 2000 as Executive Vice President. From January 1999 through December 1999, Mr. Sullivan served as President and Chief Executive Officer of United Container Machinery, Inc. From 1986 through 1998, Mr. Sullivan held various positions with us: Executive Vice President—Marketing from June 1998 through December 1998, Vice President-Marketing and Sales from April 1995 through May 1998, Director of Business Development in 1994, Director of Parts Sales and Subsidiary Operations from 1990 to 1994 and Product Manager of Electric Mining Shovels and International Sales from 1986 to 1990. Mr. Sullivan has been a director since August 2000.

Mr. Phillips served as Executive Vice President from August 2000 until March 19, 2004 when he became our Executive Vice President and Chief Operating Officer. Mr. Phillips rejoined us on January 10, 2000 as Vice President—Operations. From September, 1999 through January, 2000, Mr. Phillips served as a Consultant and Assistant to the President at United Container Machinery, Inc. From 1983 through 1999, Mr. Phillips held various positions with us: Executive Vice President—Operations from June 1998 through April 1999, Vice President—Materials from March 1996 to June 1998, Director of Materials from 1986 to 1996, Manufacturing Manager from June 1986 to October 1986 and Materials Manager from 1983 to 1986.

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Mr. Mackus became our Chief Financial Officer on June 9, 2004 after serving as Vice President—Finance from October 2002 through June 9, 2004, and has served as Secretary since May 1996 and as Controller since February 1988. Mr. Mackus was Division Controller and Assistant Corporate Controller from 1985 to 1988, Manager of Corporate Accounting from 1981 to 1982 and 1984 to 1985, and Assistant Corporate Controller of Western Gear Corporation from 1982 to 1984.

Mr. Bruno has served as Vice President—Human Resources since December 1, 1997. Mr. Bruno was a consultant from 1996 to 1997. From 1984 to 1995, Mr. Bruno held various positions in Human Resources and Administration with Eagle Industries, Inc.

Mr. Bosbous has served as Treasurer since March 1998. Mr. Bosbous was Assistant Treasurer from 1988 to 1998, and Assistant to the Treasurer from August 1984 to February 1988.

Mr. Rogers served as Chief Executive Officer between December 23, 1999 and March 19, 2004. Mr. Rogers also served as President from December 1999 to August 2000. Mr. Rogers co-founded American Industrial Partners and has been an officer and director of the firm since 1988. He is also a director of Consoltex Holdings, Inc., a manufacturer, importer and exporter of textiles, Great Lakes Carbon Corporation, the world's largest producer of calcined petroleum coke for use in aluminum smelting and Stanadyne Corporation, a diesel engine component manufacturer. Mr. Rogers was President, Chairman, Chief Executive Officer and Chief Operating Officer of NL Industries, a diversified industrial concern. He was also a Director of Allied Stores Corporation, Allied-Signal, Parsons Corporation, MCorp and Southwest Bankshares. Mr. Rogers has been a director since November 1997 and Chairman of the Board of Directors since March 19, 2004.

Mr. Bingham is a General Partner of American Industrial Partners. He co-founded American Industrial Partners and has been a director and officer of the firm since 1988. Mr. Bingham was a Managing Director of Shearson Lehman Brothers from 1984 to 1987. Prior to joining Shearson Lehman Brothers, Mr. Bingham was Director of the Corporate Finance Department, a member of the Board, and head of Mergers and Acquisitions at Lehman Brothers Inc. Prior thereto he directed investment banking operations at Kuhn Loeb & Company where he was a partner and member of the board and executive committee. Mr. Bingham is also a director of Great Lakes Carbon Corporation, the world's largest producer of calcined petroleum coke for use in aluminum smelting, Stanadyne Corporation, a diesel engine components manufacturer, MBA Polymers, Inc., and Williams Controls, Inc. He formerly served on the boards of Avis, Inc., ITT Life Insurance Corporation, Sweetheart Holdings and Valero Energy Corporation. Mr. Bingham has been a director since September 1997.

Dr. Crutcher is President of Wheaton College, a private, national liberal arts college in Norton, Massachusetts. From 1999 to 2004 Dr. Crutcher served as Provost and Executive Vice President for Academic Affairs of Miami University, a public university in Ohio and from 1994 to 1999 he served as Director of the School of Music and The Florence Thelma Hall Centennial Chair in Music at the University of Texas at Austin. He also was Vice President of Academic Affairs and Dean of the Conservatory at the Cleveland Institute of Music, an international music conservatory, from 1990 to 1994. Dr. Crutcher joined our board in June 2004.

Mr. Cusumano is a Vice President of American Industrial Partners. Mr. Cusumano joined American Industrial Partners in 2000 from the investment banking department of J.P. Morgan & Co. Inc. Mr. Cusumano is also a director of Stolle Machinery Company, LLC, a leading manufacturer of equipment and spare parts and services for the rigid packaging industry. Mr. Cusumano has been a director since April 2004.

Mr. Korthals is chairman of the Ontario Teachers' Pension Plan Board and is a director of Cognos Inc., a provider of business intelligence and corporate performance management software solutions, Easyhome, Inc., Canada's largest rental-purchase company, Rogers Communications, Inc.,

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a cable television and wireless communications company, Suncor Energy, Inc., an energy company that explores for, acquires, develops, produces, markets and refines petroleum products, Mulvihull Exchange Traded Closed-End Funds and Jannock Properties Ltd., a company that develops, for commercial and residential uses, properties previously used in its industrial operations. Mr. Korthals joined the Toronto Dominion Bank in 1967, was appointed President in 1981 and served in that capacity until 1995. Mr. Korthals holds a B.Sc. in chemical engineering and an M.B.A. from Harvard Business School. Mr. Korthals joined our board in June 2004.

Mr. Little is a director and audit committee member of Great Lakes Carbon Corporation, the world's largest producer of calcined petroleum coke for use in aluminum smelting, and a director and member of the audit and capital market committees of Unizan Financial Corp., a financial services holding company that conducts a full-service commercial and retail banking business through a subsidiary. Mr. Little held various positions with The Timken Company, a global manufacturer of highly engineered bearings, alloy and specialty steel and related components, from 1967 to 2002 and most recently served as its Senior Vice President-Finance (the chief financial officer) and Treasurer from 1992 to 2002. In 2003, Mr. Little became a director and finance committee member of Walsh University, a private university in Ohio. Mr. Little joined our board in June 2004.

Mr. Marvin is a Managing Director of American Industrial Partners. Mr. Marvin joined American Industrial Partners in 1997 from the Mergers & Acquisitions Department of Goldman, Sachs & Co. where he had been employed since 1994. Mr. Marvin is also a director of Consoltex Holdings, Inc., a manufacturer, importer and exporter of textiles, Stanadyne Corporation, a diesel engine component manufacturer and Stolle Machinery Company, LLC, a leading manufacturer of equipment and spare parts and services for the rigid packaging industry. Mr. Marvin has been a director since September 1997.

Mr. Purdum is a director and a Managing Director of American Industrial Partners. Mr. Purdum was the Non-Executive Chairman of our Board from 1997 to March 19, 2004. Mr. Purdum retired as Chairman of Armco, Inc. in 1994. From November 1990 to 1993, Mr. Purdum was Chairman and Chief Executive Officer of Armco, Inc. Mr. Purdum is also a director of Berlitz International, Inc. Mr. Purdum has been a director since November 1997.

Executive Officers

        Our executive officers named herein are elected annually and serve at the pleasure of the Board. Messrs. Bruno and Mackus are each employed under one-year employment agreements which automatically renew for additional one-year terms subject to the provisions thereof. Mr. Sullivan entered into a letter agreement with us in August 2000, which was subsequently amended and supplemented in 2002. The letter agreement covers such matters as salary, benefits and severance arrangements. See "Employment Arrangements" below.

Composition of the Board of Directors

        Our business, property and affairs are managed by, or are under the direction of, the board of directors pursuant to the General Corporation Law of the State of Delaware and our bylaws. Members of the board of directors are kept informed of our business through discussions with the chairman, the president and chief executive officer and with key members of management, by reviewing materials provided to them and by participating in meetings of the board of directors and its committees.

        After this offering our board of directors will be divided into three staggered classes, with as nearly equal a number of directors in each class as possible. Each of our directors will serve in one of three classes, the terms of which are staggered. Mr. Crutcher, Mr. Korthals and Mr. Little will

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serve in the class of directors whose terms will expire at our 2005 annual meeting; Mr. Cusumano, Mr. Purdum and Mr. Sullivan will serve in the class of directors whose terms will expire at our 2006 annual meeting; and Mr. Bingham, Mr. Marvin and Mr. Rogers will serve in the class of directors whose terms will expire at our 2007 annual meeting. At each annual meeting of stockholders, a class of directors will be elected for three-year terms to succeed the directors of the same class whose terms are then expiring.

Committees of the Board of Directors

        In connection with the consummation of this offering, our board of directors will maintain a standing audit committee, a compensation committee and a nominating and corporate governance committee.

Audit Committee

        After this offering, the audit committee will be composed of Mr. Little, Mr. Korthals and Dr. Crutcher, each of whom is an independent director, and will be chaired by Mr. Little. This committee will be generally responsible for the oversight and surveillance of our accounting, reporting and financial control practices. Among other functions, the committee will be responsible for the appointment, compensation, retention and oversight of the work of our independent public accountants. Mr. Little is a "financial expert" within the definition of that term under the regulations promulgated under the Securities Act. We believe that the composition of our audit committee will meet the requirements for independence under the current requirements of the Sarbanes-Oxley Act of 2002 and SEC rules and regulations. The Nasdaq Marketplace Rules require that the audit committee be comprised of at least three members (i) each of whom must (a) be independent in accordance with both the Nasdaq Marketplace Rules and the SEC rules and regulations, (b) not have participated in the preparation of the company's financial statements and (c) be able to read and understand fundamental financial statements and (ii) one of whom must be financially sophisticated. We will comply with these requirements and with future requirements to the extent they become applicable to us.

Compensation Committee

        After this offering, the compensation committee will be composed of Mr. Rogers, Mr. Marvin and Mr. Cusumano, and will be chaired by Mr. Rogers. This committee will approve, administer and interpret our compensation and benefit policies, including our incentive programs. It will review and make recommendations to our board of directors to ensure that our compensation and benefit policies are consistent with our compensation philosophy and corporate governance guidelines. This committee will be responsible for establishing all of our executive officers' compensation.

Nominating and Corporate Governance Committee

        After this offering, the nominating and corporate governance committee will be composed of Mr. Bingham, Mr. Purdum and Mr. Rogers, and will be chaired by Mr. Bingham. This committee will oversee the evaluation of the board and management, nominate directors for election by stockholders, nominate committee chairpersons and, in consultation with the committee chairpersons, nominate directors for membership on the committees of the board.

Director Compensation

        We expect that the independent directors on our board will be paid $25,000 annually as well as $1,500 per meeting. Our independent directors will be able to elect to receive fees in the form of shares of our Class A common stock, or to defer payment of fees pursuant to our Non-Employee

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Director Deferred Compensation Plan, described immediately below. Directors who are employees and directors affiliated with AIP, so long as it controls us, will not receive director fees. We reimburse all directors for out-of-pocket expenses. During 2003 and 2004, prior to the completion of this offering, Mr. Purdum has been paid $12,500 per month in consideration of his service as a director. This arrangement will cease upon the completion of this offering.

Non-Employee Director Deferred Compensation Plan

        Our independent directors may elect to defer payment of their fees (including annual fees and meeting fees, but excluding reimbursement of expenses) pursuant to our Non-Employee Director Deferred Compensation Plan. Under this plan, we will have an account for each plan participant to record cumulative deferred fees. The accounts will be denominated in the form of restricted Class A common stock units issued pursuant to our 2004 Equity Incentive Plan (see "Executive Compensation—2004 Equity Incentive Plan" below) in a number of shares equal to the amount of deferred fees divided by the market price of our Class A common stock and payable in cash or shares of our Class A common stock, in the discretion of our compensation committee, when the director's service on our board terminates. In the event of a change in control of the Company, all restricted stock units credited under this plan will become immediately payable to the plan participants in the form of cash.

Compensation Committee Interlocks and Insider Participation

        In 2003, Mr. Marvin, Mr. Rogers, Mr. Purdum, Mr. Bingham and Mr. Sullivan participated in deliberations of our board of directors concerning executive officer compensation. Mr. Rogers was our CEO during 2003, but received no compensation from us during such period. Mr. Sullivan was our Chief Operating Officer in 2003, but did not participate in any deliberations concerning his own compensation.

Executive Compensation

        The following table sets forth the compensation paid or awarded to our Chief Executive Officer and the four other most highly compensated executive officers serving as of December 31, 2003 for services rendered in all capacities during 2001, 2002 and 2003. We refer to these individuals, collectively, as the named executive officers.

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Summary Compensation Table

	Annual Compensation(1)			Long-Term Compensation
Name and Principal Position	Year	Salary($)	Bonus($)	Securities Underlying Options	All Other Compensation($)(2)
Timothy W. Sullivan(3) Current President and Chief Executive Officer; President and Chief Operating Officer through December 31, 2003	2003 2002 2001	423,339 379,173 329,169	652,000 640,000 240,000	— — 573,600	7,932 6,310 6,060
Thomas B. Phillips(4) Executive Vice President and Chief Operating Officer; Vice President—Operations through December 31, 2003	2003 2002 2001	258,010 221,279 207,004	252,525 129,108 85,862	— — 286,800	7,522 7,399 6,546
Craig R. Mackus(5) Current Chief Financial Officer, Controller and Secretary; Vice President-Finance, Controller and Secretary through December 31, 2003	2003 2002 2001	179,155 163,212 154,728	121,406 66,411 44,580	— — 107,264	6,786 6,730 5,666
Frank P. Bruno Vice President-Human Resources	2003 2002 2001	148,635 144,089 138,150	97,125 58,183 39,690	— — 95,792	6,870 6,248 5,721
Theodore C. Rogers(6) Current Chairman of the Board; Chief Executive Officer through December 31, 2003	2003 2002 2001	— — —	— — —	— — —	— — —

(1)

Certain personal benefits provided by us to the named executive officers are not included in the above table as permitted by the Securities and Exchange Commission regulations because the aggregate amount of such personal benefits for each named executive officer in each year reflected in the table did not exceed the lesser of $50,000 or 10% of the sum of such officer's salary and bonus in each respective year.

(2)

All Other Compensation in the table includes the following: (i) the employer match under our 401(k) savings plan for 2003, 2002 and 2001, respectively: Mr. Bruno ($6,000, $5,513 and $4,575), Mr. Mackus ($6,000, $6,000 and $5,250), Mr. Phillips ($6,000, $6,000 and $5,250), and Mr. Sullivan ($6,000, $5,500 and $5,250); (ii) imputed income from life insurance for 2003, 2002 and 2001, respectively: Mr. Bruno ($870, $735 and $1,146), Mr. Mackus ($786, $730 and $416), Mr. Phillips ($1,522, $1,399 and $1,296) and Mr. Sullivan ($1,932, $810 and $810).

(3)

On March 19, 2004, Mr. Sullivan became President and Chief Executive Officer.

(4)

Mr. Phillips became Executive Vice President and Chief Operating Officer on March 19, 2004.

(5)

Mr. Mackus became Chief Financial Officer in June 2004.

(6)

Mr. Rogers became Chief Executive Officer on December 23, 1999 and served in that capacity until March 19, 2004. No compensation was paid to Mr. Rogers during his tenure as Chief Executive Officer. Mr. Sullivan succeeded Mr. Rogers as Chief Executive Officer on March 19, 2004.

Option Grants

        There were no options granted to the named executive officers in 2003.

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Aggregate Option Exercises in 2003 and Year-End Option Values

        The following table sets forth information regarding the exercise of stock options by each of the named executive officers during 2003 and the fiscal year-end value of the unexercised stock options held by such officers.

			Number of Securities Underlying Unexercised Options at End of Fiscal Year 2003 (#)		Value of Unexercised In-The-Money Options at End of Fiscal Year 2003(1)($)
Name	Shares Acquired On Exercise (#)	Value Realized(2)($)	Exercisable	Unexercisable	Exercisable	Unexercisable
F. P. Bruno	47,896	46,997	—	96,696	—	175,838
C. R. Mackus	53,632	52,626	—	113,632	—	196,896
T. B. Phillips	143,400	140,710	—	143,400	—	526,457
T. W. Sullivan	286,800	281,422	—	286,800	—	1,052,915

(1)

As of December 31, 2003, there was no trading market for our common stock and, as a result, no value determinable by reference to a trading market therefor. The value of the shares underlying options was determined by our management through application of a formula which takes into account specified recent performance and debt levels, in addition to other factors. Under this formula, as of December 31, 2003, the deemed value of one share of common stock was $3.80.

(2)

As of the date of the exercise of the options, there was no trading market for our common stock and, as a result, no value determinable by reference to a trading market therefor. At June 25, 2003 and September 25, 2003, the dates of option exercise, the value of the shares under the formula discussed in footnote (1) above was $1.20 and $1.02, respectively.

1998 Management Stock Option Plan

        On March 17, 1998, the Board adopted the 1998 Management Stock Option Plan, or 1998 Option Plan, as part of the compensation and incentive arrangements for certain of our management employees and those of our subsidiaries. The 1998 Option Plan provides for the grant of stock options to purchase up to an aggregate of 1,600,000 shares of our common stock at exercise prices to be determined in accordance with the provisions of the 1998 Option Plan. Other than options granted on August 1, 2001, all options granted under the 1998 Option Plan are targeted to vest on the last day of the four fiscal years immediately following the grant dates, at the rate of 25% of the aggregate number of shares of common stock underlying each series of options per year, provided that we attained a specified target of EBITDA in that fiscal year. All of the options whose vesting is contingent upon the attainment of performance goals will vest upon the ninth anniversary of the date of grant, regardless of whether such goals have been attained. Options granted under the 1998 Option Plan on August 1, 2001 are targeted to vest at the rate of 25% of the total option shares covered by the grant per year for the four years subsequent to the date of the grant. As of the date of this prospectus, 573,600 options granted under the 1998 Option Plan have vested and were exercised. There are no currently vested options outstanding under the 1998 Option Plan. As of the date of this prospectus, 802,400 options were issued and unvested. All of these remaining options will vest upon the completion of this offering.

        Upon the termination for cause of a participant in the 1998 Option Plan, any unexercised options held by the participant will immediately expire and be forfeited. In the event of a termination without cause, unless provided otherwise in the participant's employment agreement, the unvested portion of options granted will immediately expire. If the termination occurs prior to a qualified public offering (as defined in the 1998 Option Plan), we will repurchase vested options at fair market value, and if the termination occurs after a qualified public offering, the unexercised portion

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of the options granted will remain exercisable for 90 days and will then terminate in full. In the event of a plan participant's voluntary termination of employment, or upon termination of employment due to death or disability unvested options will immediately expire. If the termination occurs prior to a qualified public offering, we will repurchase unexercised vested options at a price equal to the lower of (i) the options' fair market value or (ii) the excess of (x) the options' exercise price, increased at a rate of 6% per year from the grant date over (y) the options' exercise price. If the termination occurs after a qualified public offering, the unexercised vested portion of options granted will remain exercisable for 90 days and then will terminate in full. The board of directors will have the discretion to permit options granted to retirees to remain outstanding after the date of retirement.

        Notwithstanding the foregoing, all options granted under the 1998 Option Plan vest automatically, in the event of a Company Sale (as defined in the 1998 Option Plan), immediately prior to such sale, provided the sale occurs prior to the fourth anniversary of the grant. Options granted pursuant to the 1998 Option Plan may be forfeited or repurchased by us at fair value, as defined in the plan, in the event of the participating employee's termination, and if not previously forfeited or exercised, expire and terminate no later than ten years after the date of grant or, in the event of a Company Sale, upon the consummation of such sale.

2004 Equity Incentive Plan

        We will adopt the Bucyrus International, Inc. 2004 Equity Incentive Plan, and obtain stockholder approval of the plan, prior to the completion of this offering. The plan will expire on the tenth anniversary of its effective date, unless terminated earlier by the board of directors. The plan provides for the grant of equity-based awards, including restricted stock, restricted stock units, stock options, stock appreciation rights (SARs), and other equity-based awards to our directors, officers, including each of the named executive officers, and other employees, advisors and consultants and those of our subsidiaries who are selected by our compensation committee for participation in the plan.

        The plan will be administered by our board of director's compensation committee, which will at all times consist of directors who are "outside directors" for purposes of Section 162(m) of the Internal Revenue Code and "non-employee directors" for purposes of Rule 16b-3 under the Exchange Act. The compensation committee has the authority, among other things, to determine who will be granted awards and all of the terms and conditions of the awards, including but not limited to the effect of a change in control of the Company on those awards. The compensation committee is also authorized to determine to what extent an award may be settled, cancelled, forfeited or surrendered, to interpret the plan and any awards granted under the plan and to make all other determinations necessary or advisable for the administration of the plan. Where the vesting or payment of an award under the plan is subject to the attainment of performance goals, the compensation committee will be responsible for certifying that the performance goals have been attained. Neither the compensation committee nor our board of directors has the authority under the plan to reprice, or to cancel and re-grant, any stock option granted under the plan, or to take any action that would lower the exercise, base or purchase price of any award granted under the plan without first obtaining the approval of our stockholders.

        A maximum of shares of our Class A common stock equal to 5% of the total number of shares of our Class A and Class B common stock outstanding as of immediately following this offering, calculated on a fully diluted basis, will be available for awards under the plan. Shares issued under the plan may be authorized but unissued shares or treasury shares. If any shares subject to an award granted under the plan are forfeited, cancelled, exchanged or surrendered or if an award terminates or expires without a distribution of shares, or if shares of stock are surrendered or withheld as payment of either the exercise price of an award and/or withholding taxes in respect of an award, those shares will again be available for awards under the plan. Under the plan, no more

73

than 160,000 shares of our Class A common stock may be made subject to stock options or stock appreciation rights to a single individual in a single plan year, and no more than 160,000 shares of our Class A common stock may be made subject to awards other than stock options or SARs to a single individual in a single plan year. In the event that the compensation committee determines that any corporate event, such as a stock split, reorganization, merger, consolidation, repurchase or share exchange, affects our Class A common stock such that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of plan participants, then the compensation committee will make those adjustments as it deems necessary or appropriate to any or all of (i) the number and kind of shares or other property that may thereafter be issued in connection with future awards, (ii) the number and kind of shares or other property that may be issued under outstanding awards, (iii) the exercise price or purchase price of any outstanding award and (iv) the performance goals applicable to outstanding awards.

        The compensation committee will determine all of the terms and conditions of awards under the plan, including whether the vesting or payment of an award will be subject to the attainment of performance goals. The compensation committee may base performance goals on one or more of the following criteria, determined in accordance with generally accepted accounting principles, where applicable:

•

earnings before or after interest, taxes, depreciation, amortization, or extraordinary or special items;



•

net income, before or after extraordinary or special items;



•

return on equity (gross or net), before or after extraordinary or special items;



•

earnings per share, before or after extraordinary or special items; or



•

stock price.

        The performance goals may be expressed in terms of attaining a specified level of the particular criterion, an increase or decrease in the particular criterion or a comparison of achievement against a peer group of companies, and may be applied to the Company or a subsidiary or division or strategic business unit of the Company. The compensation committee has the authority to make equitable adjustments to the performance goals in recognition of unusual or non-recurring events, in response to changes in laws or regulations or to account for extraordinary or unusual events. Where an award under the plan is made subject to a performance goal, no compensation may be paid under such award unless and until the compensation committee certifies that the goal has been attained.

        The terms and conditions of stock options and SARs granted under the plan will be determined by the compensation committee and set forth in an agreement. Stock options granted under the plan may be "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code, or non-qualified stock options. SARs confer on the participant the right to receive an amount, in cash or shares of our Class A common stock, equal to the excess of the fair market value of a share of Class A common stock on the date of exercise over the grant price of the SAR, and may be granted alone or in tandem with another award. The exercise price of an option or SAR granted under the plan will not be less than the fair market value of our Class A common stock on the date of grant. The grant price of an SAR granted in tandem with a stock option will be the same as the stock option to which the SAR relates. The vesting of a stock option or SAR will be subject to such conditions as the compensation committee may determine, which may include the attainment of performance goals as well as continued employment with us.

        The terms and conditions of awards of restricted stock and restricted stock units granted under the plan will be determined by the compensation committee and set forth in an award agreement. A

74

restricted stock unit confers on the participant the right to receive a share of our Class A common stock or its equivalent value in cash, in the discretion of the compensation committee. These awards will be subject to restrictions on transferability which may lapse under those circumstances that the compensation committee determines, which may include the attainment of performance goals as well as continued employment with us. The compensation committee may determine that the holder of restricted stock or restricted stock units may receive dividends (or dividend equivalents, in the case of restricted stock units) that may be deferred during the restricted period applicable to these awards.

        The plan also provides for other equity-based awards, the form and terms of which will be as determined by the compensation committee, consistent with the purposes of the plan. The vesting or payment of one of these awards may be made subject to the attainment of performance goals as well as to continued employment with us.

        The plan also provides for the issuance of shares of our Class A common stock to our non-employee directors if such a director elects to receive, in the form of stock, payment of the fees (including annual fees and meeting fees, but not including reimbursement for expenses) to which the non-employee director would otherwise be entitled in consideration of the director's services to us. In addition, the plan provides for the issuance of restricted stock units for the purpose of fulfilling our obligations under our Non-Employee Director Deferred Compensation Plan, (see "Director Compensation—Non-Employee Director Deferred Compensation Plan" described above).

        The board of directors may amend the plan at any time, provided that any amendment that would require stockholder approval in order for the plan to continue to qualify under Section 162(m) of the Internal Revenue Code or to comply with securities laws or other applicable laws or regulations will not be effective prior to obtaining stockholder approval.

Executive Officer Incentive Plan

        We will adopt the Bucyrus International, Inc. Executive Officer Incentive Plan, and obtain stockholder approval of the plan, prior to the completion of our offering. The plan provides for the award of cash bonuses to our executive officers, including each of the named executive officers. Plan participants generally will be selected by the compensation committee of our board of directors. The plan is designed to comply with Section 162(m) of the Internal Revenue Code, and it will be administered accordingly.

        For fiscal years after 2004, the plan will be administered by the compensation committee of our board of directors. The compensation committee has the authority, among other things, to select plan participants, to determine all of the terms and conditions relating to any award, including the performance goals applicable to the award, and to make all other determinations under the plan deemed necessary or advisable for the administration of the plan. The performance goals that may be applied to awards under this plan are the same as those discussed above under "2004 Equity Incentive Plan." For our 2004 fiscal year, the plan will be administered by our president and chief executive officer and our vice president of human resources.

        Payment of bonuses under the plan will be contingent upon the achievement of performance goals during a performance period. Both the performance goals and the performance period will be specified by the compensation committee. Performance periods under the plan may not exceed one year in length. The performance goals applicable to awards for any performance period will be determined by the compensation committee prior to the expiration of one-quarter of the performance period. The compensation committee may also determine minimum, target and maximum levels applicable to each performance goal. Awards for any performance period may be expressed as a dollar amount or as a percentage of the participant's annual base salary. Unless otherwise determined by the compensation committee, payment of awards will be made only if and

75

to the extent the performance goals with respect to a performance period are attained. In no event may payment in respect of an award under the plan be in excess of $5 million, if the payment were to be made to an executive officer who is a "covered employee" within the meaning of Section 162(m) of the Internal Revenue Code.

        Generally, in order for an award to be paid out under the plan, the participant must be employed with us at the time payment is made. If a participant's employment with us is terminated prior to the time an award is paid by reason of the participant's death, disability or retirement, the participant (or the participant's beneficiary, if applicable) will be entitled to a pro-rata portion of the participant's award. If a participant's employment with us is terminated prior to the time an award is paid for any other reason, the compensation committee has the authority to determine whether the Company will pay all or any portion of the participant's award; provided, that in no event will any portion of an award be paid to a participant if we terminate the participant's employment with us for "cause" (as defined in the plan).

        Our board of directors or the compensation committee may at any time amend, suspend or terminate the plan in whole or in part. No amendment that requires shareholder approval in order for the plan to continue to comply with Section 162(m) of the Internal Revenue Code or any other applicable law will be effective unless the approval is obtained. In addition, no amendment or termination of the plan will affect adversely the rights of any participant who has an outstanding award under the plan without the participant's consent.

Defined Benefit Pension Plan

        We maintain a defined benefit pension plan, which we refer to as the Pension Plan, for salaried employees, including certain of the named executive officers.

Defined Benefit Formula

        Historically, the Pension Plan used a Defined Benefit Formula to determine the annual benefits payable to employees upon normal retirement age. The following table sets forth the estimated annual benefits payable on a straight life annuity basis (prior to offset of one-half of estimated Social Security benefits) to participating employees upon retirement at normal retirement age for the years of service and the average annual earnings indicated under the defined benefit formula.

	Years of Service
Remuneration
	35		30		25		20		15
$125,000	$	76,563	$	65,625	$	54,688	$	43,750	$	32,813
150,000		91,875		78,750		65,625		52,500		39,375
175,000		107,188		91,875		76,563		61,250		45,938
200,000		122,500		105,000		87,500		70,000		52,500
225,000		137,813		118,125		98,438		78,750		59,063
250,000		153,125		131,250		109,375		87,500		65,625
300,000		183,750		157,500		131,250		105,000		78,750
400,000		245,000		210,000		175,000		140,000		105,000
450,000		275,625		236,250		196,875		157,500		118,125
500,000		306,250		262,500		218,750		175,000		131,250

Cash Balance Formula

        Effective January 1, 2000, the Pension Plan was converted to a cash balance formula for all employees except for those who, on December 31, 1999, were either age 60 and above or age 55 with 10 years or more years of credited service. The actuarial equivalent of benefits earned as of

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December 31, 1999 was used to establish an opening account balance. Each month a percentage of the employee's earnings is credited to the account in accordance with the following table:

Service at the Beginning of Year	Pay Credits
Less than 5	4.0	%
5 but less than 10	4.5	%
10 but less than 15	5.0	%
15 but less than 20	5.5	%
20 but less than 25	6.0	%
25 but less than 30	6.5	%
30 or more	7.0	%

        In addition, employees hired prior to January 1, 1999 receive transition pay-based credits of 1.5% to 2.5% for the next five years. Each account is also credited with interest using the average annual rate of U.S. 30-year Treasury Securities for the November preceding the plan year.

        Upon termination of employment, the employee may receive benefits in the form of a lump sum equal to the value of the cash balance account or a monthly annuity equal to the actuarial equivalent of the cash account balance.

General

        Covered compensation for purposes of the Pension Plan consists of the average of a participant's highest total salary and bonus (excluding compensation deferred pursuant to any non-qualified plan) for a consecutive five year period during the last ten calendar years of service prior to retirement.

        Mr. Rogers does not participate in the Pension Plan. Mr. Bruno's benefits under the Pension Plan will be determined under the Defined Benefit Formula described above. The years of credited service under the Pension Plan for Mr. Bruno are 6.

        The Pension Plan benefits payable to Messrs. Mackus, Phillips and Sullivan will be determined under the cash balance formula described above. The years of credited service under the Pension Plan for Messrs. Mackus, Phillips and Sullivan are 24, 27 and 24, respectively. As of December 31, 2003, the estimated annual benefits payable under the Pension Plan at normal retirement age (as determined under the Pension Plan) to Messrs. Mackus, Phillips and Sullivan were $75,660, $58,386 and $69,829, respectively. In making these estimates, the assumptions were (i) that 2003 pay remains level to normal retirement age; (ii) that the 2003 compensation limit of $205,000 remains level to normal retirement age; (iii) that the interest crediting rate for all years is 4.96%—the November, 2002 30-year Treasury rate, which is the rate used for the 2003 plan year; and the projected cash balance at normal retirement age was converted to an annuity using an interest rate of 4.96% and the 1994 Group Annuity Mortality Table for Males and Females.

Supplemental Plan

        Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as amended, limit the annual benefits which may be paid from a tax-qualified retirement plan. As permitted by the Employee Retirement Income Security Act of 1974, we have a supplemental plan which authorizes the payment out of our general funds of any benefits calculated under provisions of the applicable retirement plan which may be above the limits under these sections.

Employment Arrangements

        We have employment agreements with certain of the named executive officers. These agreements govern the executive's compensation, benefits and treatment upon termination under various circumstances, including voluntary termination by either party, or termination by reason of retirement, death or disability, or in the event of a change of control, as those terms are defined in the agreements. Each employment agreement automatically renews for a one-year term upon the expiration of its initial term and any subsequent terms, unless two months' written notice is given by either party of intent to terminate at the end of that term. Each employment agreement may be

77

terminated by either us or the executive at any time by giving notice as required under the agreement, provided, however, that if the executive is terminated by us without cause at any time, or if the executive terminates his employment with good reason in connection with a change in control, as those terms are defined in the agreement, then the executive will be entitled to certain severance benefits as described in that executive's individual agreement. Finally, each agreement imposes confidentiality restrictions on the executive and places restrictions on the executive's involvement in activities that may compete with us both during employment and following termination. Violation of such confidentiality and non-competition provisions, or other termination for cause, as defined in the agreements, may result in forfeiture of severance and other benefits that may otherwise accrue. Individual compensation, benefits and other salient features of each agreement are described below.

        Messrs. Bruno and Mackus each serve under one-year employment agreements with us dated December 1, 1997 and May 21, 1997, respectively. The agreements automatically renew for successive one-year terms unless terminated by either party at least 60 days prior to the end of a one-year term. Each of these agreements provides for the executive's position and base salary, which is subject to merit increases in accordance with our normal salary merit increase review policy. In addition, the executive is entitled to participate in such employee and fringe benefits plans as we provide to other similarly situated management employees. Upon termination without cause or through non-renewal of the contract, we will continue to pay salary and benefits for one year. In the event of a "qualifying termination" (as defined in the agreements) of employment within one year of a change of control with respect to us, we will make a severance payment equal to one-half of the executive's then-current annual base salary, and all unvested stock options will immediately vest and become exercisable as of the date of the change of control. For purposes of the employment agreements, a "change of control" occurs when: (i) securities representing more than 50% of the combined voting power of our then outstanding voting securities are acquired, directly or indirectly, by any person or entity who did not on the date of the applicable employment agreement own, directly or indirectly, 5% or more of the combined voting power of our voting securities outstanding on the date of the applicable employment agreement, (ii) a merger or consolidation of any other corporation with us is completed and as a result less than 50% of the outstanding voting securities of the surviving or resulting entity are owned by our former shareholders (other than a shareholder who is an "affiliate," as defined in the Securities Exchange Act of 1934, of any party to such consolidation or merger) or (iii) substantially all of our assets are sold to a corporation which is not wholly-owned by us.

        In August 2000, we entered into an agreement with Mr. Sullivan to serve as our President. Simultaneous with that agreement, Mr. Sullivan was elected to the board of directors and assumed the additional position as Chief Operating Officer. On March 19, 2004, Mr. Sullivan was elected Chief Executive Officer. The agreement was amended and supplemented in 2002. The agreement provides for a base salary of not less than $400,000, which is subject to increase at the discretion of the Board and for additional incentive-based compensation. The agreement also imposes confidentiality restrictions on Mr. Sullivan and places restrictions on Mr. Sullivan's involvement in activities that may compete with us both during employment and following termination. In the event that Mr. Sullivan's employment is terminated for any reason other than for cause, he will be entitled to receive severance pay in the amount of one year's base salary. In addition, Mr. Sullivan is entitled to participate in employee and benefit plans that we provide to similarly situated management employees. Prior to the completion of this offering, we plan to restate our employment arrangements with Mr. Sullivan in the form of a single agreement. We do not anticipate that the restated arrangements will differ materially from our current arrangements with Mr. Sullivan, except that incentives exclusively based on sales of parts and equipment will be terminated retroactive to January 1, 2004, and Mr. Sullivan will participate in the 2004 Executive Officer Incentive Plan.

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        On March 5, 2002, we entered into a Termination Benefits Agreement with Mr. Phillips which is intended to provide benefits to Mr. Phillips only in the event of a change of control or ownership of us or any of our subsidiaries prior to December 31, 2005. In the event of the occurrence of certain terminations or deemed terminations of employment following a change of control, Mr. Phillips will be entitled to payments in an amount equal to annual base salary plus annual incentives, and certain benefits will be maintained. For purposes of the Termination Benefits Agreement, a change of control occurs when (i) all or substantially all of our or our subsidiaries' assets are sold to a person or entity (other than any person or entity directly or indirectly controlled by AIP) or (ii) more than 51% of our or our subsidiaries' voting securities and capital stock is acquired by a person or entity (other than any person or entity directly or indirectly controlled by AIP).

Liability Limitations and Indemnification

        Our amended and restated certificate of incorporation, or certificate of incorporation, will limit the liability of directors to the maximum extent permitted by Delaware law. Delaware law expressly permits a corporation to provide that its directors will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except liability for:

•

any breach of their duty of loyalty to the corporation or its stockholders;



•

acts or omissions that are not in good faith or that involve intentional misconduct or a knowing violation of law;



•

unlawful payments of dividends or unlawful stock repurchases or redemptions; or



•

any transaction from which the director derived an improper personal benefit.

These express limitations do not apply to liabilities arising under the federal securities laws and do not affect the availability of equitable remedies, including injunctive relief or rescission.

        The provisions of Delaware law that relate to indemnification expressly state that the rights provided by the statute are not exclusive and are in addition to any rights provided in a certificate of incorporation, bylaws, agreement or otherwise. Our certificate of incorporation will provide that we will indemnify our directors and officers, to the maximum extent permitted by law and that we may indemnify other employees and agents. Our amended and restated bylaws, or bylaws, will also permit us to secure insurance on behalf of any officer, director, employee or agent for any liability arising out of actions in his or her capacity as an officer, director, employee or agent. We have obtained an insurance policy that insures our directors and officers against losses, above a deductible amount, from specified types of claims. We believe that these provisions and policies will help us attract and retain qualified persons.

        The limited liability and indemnification provisions in our certificate of incorporation, bylaws and any related indemnification agreements may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duties and may reduce the likelihood of derivative litigation against our directors and officers, even though a derivative action, if successful, might otherwise benefit us and our stockholders. A stockholder's investment in us may be adversely affected to the extent we pay the costs of settlement or damage awards against our directors and officers under these indemnification provisions.

        At present, there is no pending litigation or proceeding involving any of our directors, officers or employees in which indemnification is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

        Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, employees and agents under our certificate of incorporation or any related indemnification agreements we have been advised that, in the opinion of the SEC, this indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Management Services Agreement

        In accordance with the Management Services Agreement, AIP and its affiliates have provided us with general financial and strategic advisory services, including the evaluation of acquisition opportunities, advice on the management of our previously leveraged capital structure, the design of management incentive plans and the recruitment of senior executives. Pursuant to the Management Services Agreement, AIP is paid an annual fee of $1.45 million with provisions for interest on all deferred fees for these services. Additionally, we are required to reimburse AIP for all out-of-pocket expenses incurred in the course of providing its services to us. All of our payment obligations under the Management Services Agreement are guaranteed by certain of our subsidiaries named therein. Payment of a substantial portion of the management fee has been deferred and is subordinated in right of payment to the existing senior secured credit facility. In 2003, $2.5 million was paid to AIP under the Management Services Agreement. At December 31, 2002, 2003 and March 31, 2004, $5.2 million, $5.9 million and $6.5 million, respectively, was payable to AIP under the Management Services Agreement in respect of fees, deferred fees and out-of-pocket expenses. Five of our directors (Messrs. Bingham, Marvin, Purdum, Rogers and Cusumano) hold various positions with AIP and may be deemed to have an indirect interest in this arrangement. The expense recognized related to the Management Services Agreement was $1.6 million in 2001, $1.6 million in 2002, $3.2 million in 2003 and $0.5 million for the three months ended March 31, 2004. A portion of the proceeds of this offering, as described in "Use of Proceeds," will be used to pay remaining amounts owed to AIP under the Management Services Agreement which will be terminated prior to the completion of this offering.

Registration Rights Agreement

        Prior to the completion of this offering, we will be a party to a Registration Rights Agreement which will amend and restate our Stockholders Agreement, as amended, dated as of March 17, 1998, with AIP/BI and other stockholders which we refer to, together with AIP/BI, as the Stockholders. All of the Stockholders are current or former members of our management or board of directors or current or former employees of AIP. The holders of a majority of shares held by AIP and its affiliates will have unlimited demand registration rights on Forms S-2 or S-3 and up to three demand registrations on Form S-1, in all cases subject to customary conditions, including a requirement that such demands cover a minimum number of shares. Other Stockholders will have "piggy-back" registration rights entitling them to include their shares in demand registrations, subject to customary cutback in the case of underwritten offerings reduced in size at the request of the managing underwriter. Pursuant to a demand registration, AIP/BI may only demand the registration of at least two million shares, or fewer shares if all of AIP/BI's shares are requested to be registered, provided that such number of shares cannot be sold pursuant to Rule 144. The agreement also permits the Stockholders to join in registrations of shares by us, subject to Stockholder cutback in the case of underwritten offerings reduced in size at the request of the managing underwriter. We are responsible for the registration expenses in connection with the performance of our obligations under the Registration Rights Agreement. The Registration Rights Agreement will also provide for indemnification and contribution by us for the benefit of the Stockholders and, in limited situations, by the Stockholders for the benefit of us and any underwriters with respect to the information included in any registration statement, prospectus or related document. The Registration Rights Agreement will also contain provisions that can limit the ability of the other Stockholders to sell their shares during the pendency of and for a limited time after the completion of registered offerings triggered or joined by AIP/BI.

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Dragline Lease Arrangement

        On November 7, 2001, one of our subsidiaries completed a sale of a refurbished dragline, which was then leased back to Holdings by the lessor, BCC Equipment Leasing Corporation. The term of the lease is ten years with required monthly payments. Gross proceeds received by us on a consolidated basis upon the sale of the dragline were approximately $8 million, which represented a reimbursal of costs associated with the transaction. The lease is a net lease, under which we are responsible for maintenance, insurance and taxes on the leased equipment. The terms of the lease include indemnity, assumption of loss and tax gross-up provisions on our part. Pursuant to a ten year limestone extraction agreement entered into with Bahama Rock Ltd. and Martin Marietta Materials, Inc. in July 2001, Holdings, through a subcontract arrangement with our Minserco subsidiary, operates the dragline leased under the dragline lease agreement. Minserco will assume (i) the rights and obligations under the dragline lease and (ii) the obligations under the limestone extraction agreement prior to Holdings' dissolution pursuant to the corporate reorganization immediately before this offering. We will guarantee Minserco's obligations under the dragline lease and the limestone extraction agreement. Minserco's assumption of these agreements will have no material impact on our financial condition.

Tax Sharing Arrangements

        We, our domestic subsidiaries and Holdings file a consolidated federal income tax return. Pursuant to an election in our consolidated tax return, the consolidated tax expense of the affiliated group is allocated using the pro rata method based on each company's positive contribution to consolidated federal taxable income. The tax sharing arrangements with Holdings will be terminated upon Holdings' dissolution pursuant to the corporate reorganization which will occur immediately prior to the closing of this offering.

Director Fees

        During 2003 and 2004, prior to the completion of this offering, Mr. Purdum has been paid $12,500 per month in consideration of his service as a director. This arrangement will cease upon the completion of this offering. Of our current directors, Messrs. Bingham, Cusumano, Marvin, Purdum and Rogers are affiliates of AIP. Directors affiliated with AIP will not receive director's fees upon the completion of this offering so long as AIP controls us.

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PRINCIPAL AND SELLING STOCKHOLDERS

        The following table sets forth certain information concerning the beneficial ownership of our common stock as of July 6, 2004, on an actual basis and as adjusted to give effect to the sale of the shares of common stock in this offering, for:

•

each of the named executive officers;



•

each of our directors;



•

each person known by us to hold beneficially more than 5% of our common stock; and



•

all of our executive officers and directors as a group.

        Except as otherwise set forth in the footnotes below, each beneficial owner has the sole power to vote and dispose of all ordinary shares held by that beneficial owner. Shares of common stock issuable pursuant to options, to the extent such options are exercisable within 60 days, are treated as beneficially owned and outstanding for the purpose of computing the percentage ownership of the person holding the option, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

        The following table reflects our equity structure and beneficial ownership prior to and after this offering and the recapitalization being undertaken in connection with this offering, as well as the effect of the issuance of Class A common stock in this offering. The percentage of beneficial ownership of our common stock before this offering is based on 12,058,400 shares of our common stock, of a single class, outstanding as of July 6, 2004. The percentage of beneficial ownership of our Class A common stock and Class B common stock after this offering is based on 8,557,177 shares of our Class A common stock and 11,442,400 shares of our Class B common stock outstanding. AIP/BI has agreed to sell the number of shares of common stock indicated as being subject to the over-allotment option in the event that the underwriters exercise their option to purchase additional shares. If the over-allotment option is not exercised, AIP/BI will not offer or sell any shares of common stock in this offering.

											Percentage of Total Number of Outstanding Shares of Common Stock
							Percentage of Total Voting Power of Common Stock
				Percentage of Class A Common Shares Beneficially Owned After Offering(1)		Percentage of Class B Common Shares Beneficially Owned After Offering(1)
		Percentage of Common Shares Beneficially Owned
	Number of Common Shares Beneficially Owned
Name**							Before Offering		After Offering(1)		Before Offering		After Offering(1)
Bucyrus Holdings, LLC(2)(5)(6)	11,442,400	94.9	%	—		—	—		—		—		—
AIP/BI LLC(3)(5)(6)	—	—		—		100.0%	94.9	%	72.8	%	94.9	%	57.2	%
W. R. Bingham(4)(6)	—	—		—		—	—		—		—		—
F. P. Bruno(7)	146,992	1.2	%	1.7	%	—	1.2	%	*		1.2	%	*
R. A. Crutcher	—	—		—		—	—		—		—		—
D. M. Cusumano(4)	—	—		—		—	—		—		—		—
R. W. Korthals	—	—		—		—	—		—		—		—
G. E. Little	—	—		—		—	—		—		—		—
C. R. Mackus(8)	171,264	1.4	%	2.0	%	—	1.4	%	*		1.4	%	*
K. A. Marvin(4)	—	—		—		—	—		—		—		—
T. B. Phillips(9)	286,800	2.4	%	3.3	%	—	2.4	%	*		2.4	%	1.4	%
R. L. Purdum(4)	—	—		—		—	—		—		—		—
T. C. Rogers(4)(6)	—	—		—		—	—		—		—		—
T. W. Sullivan(10)	573,600	4.6	%	6.5	%	—	4.6	%	1.8	%	4.6	%	2.8	%
All directors and executive officers as a group (13 persons)	1,268,800	10.0	%	13.7	%	—	10.0	%	3.9	%	10.0	%	6.1	%

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	Beneficial Ownership if Over-Allotment Option is Exercised in Full
	Percentage of Class A Common Shares Beneficially Owned(1)		Percentage of Class B Common Shares Beneficially Owned(1)		Percentage of Total Voting Power of Common Stock(1)		Percentage of Total Number of Outstanding Shares of Common Stock(1)
Name**	After Offering		After Offering		After Offering		After Offering
Bucyrus Holdings, LLC(2)(5)(6)	—		—		—		—
AIP/BI LLC(3)(5)(6)	—		100.0	%	67.8	%	51.3	%
W. R. Bingham(4)(6)	—		—		—		—
F. P. Bruno(7)	1.5	%	—		*		*
R. A. Crutcher	—		—		—		—
D. M. Cusumano(4)	—		—		—		—
R. W. Korthals	—		—		—		—
G. E. Little	—		—		—		—
C. R. Mackus(8)	1.7	%	—		*		*
K. A. Marvin(4)	—		—		—		—
T. B. Phillips(9)	2.9	%	—		*		1.4	%
R. L. Purdum(4)	—		—		—		—
T. C. Rogers(4)(6)	—		—		—		—
T. W. Sullivan(10)	5.7	%	—		1.9	%	2.8	%
All directors and executive officers as a group (13 persons)	12.2	%	—		4.1	%	6.1	%

*

Less than 1%.

**

Unless otherwise specified, the address for each beneficial owner is c/o Bucyrus International, P.O. Box 500, 1100 Milwaukee Avenue, South Milwaukee, Wisconsin.

(1)

Reflects our new equity structure after completion of our recapitalization.

(2)

The address of Bucyrus Holdings, LLC, or Holdings, is One Maritime Plaza, Suite 2525, San Francisco, CA 94111. As part of the Corporate Reorganization immediately prior to this offering, Holdings will be dissolved after the associated recapitalization, its shares will be transferred to American Industrial Partners Capital Fund II, or the Fund and the Fund will contribute the shares to its newly formed subsidiary, AIP/BI LLC, or AIP/BI which will then own all of our outstanding shares of Class B common stock.

(3)

The address of AIP/BI LLC is One Maritime Plaza, Suite 2525, San Francisco, CA 94111. As part of the Corporate Reorganization immediately prior to this offering, Holdings will be dissolved after the associated recapitalization, its shares will be transferred to the Fund and the Fund will contribute the shares to its newly formed subsidiary, AIP/BI which will then own all of our outstanding shares of Class B common stock.

(4)

Messrs. Rogers and Bingham are founding partners, Mr. Purdum is a partner, Mr. Marvin is a managing director and Mr. Cusumano is a Vice President of American Industrial Partners, a Delaware general partnership, or AIGP, the general partner of the Fund. Messrs. Rogers, Bingham, Purdum, Marvin, and Cusumano each disclaim beneficial ownership of all of our shares indirectly held by AIGP.

(5)

Under the terms of Holdings' operating agreement (and the proposed operating agreement of AIP/BI) voting and dispositive power rests with the Managing Member, the Fund, and accordingly the Fund may be deemed to be the beneficial owner of the shares of common stock of the Company currently held by Holdings and all of our shares of Class B common stock which will be held by AIP/BI upon the completion of this offering.

(6)

Mr. Bingham and Mr. Rogers, together, have voting and dispositive power over American Industrial Partners Corporation, the general partner of AIGP, and accordingly each of Mr. Bingham and Mr. Rogers may be deemed to be the beneficial owner of the shares of common stock of the Company currently held by Holdings and all of our shares of Class B common stock which will be held by AIP/BI upon the completion of this offering. Mr. Bingham and Mr. Rogers each disclaim beneficial ownership of such shares.

(7)

Includes 96,696 shares issuable upon exercise of outstanding stock options exercisable within 60 days of July 6, 2004.

(8)

Includes 113,632 shares issuable upon exercise of outstanding stock options exercisable within 60 days of July 6, 2004.

(9)

Includes 143,400 shares issuable upon exercise of outstanding stock options exercisable within 60 days of July 6, 2004.

(10)

Includes 286,800 shares issuable upon exercise of outstanding stock options exercisable within 60 days of July 6, 2004.

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DESCRIPTION OF CAPITAL STOCK

The following description of our capital stock does not purport to be complete and is subject to, and is qualified by, our amended and restated certificate of incorporation, or certificate of incorporation, and our amended and restated bylaws, or bylaws, which are filed as exhibits to the registration statement of which this prospectus is a part.

        This offering is part of a comprehensive recapitalization of our equity. As of July 6, 2004, there were 8 holders of our common stock, which consisted of a single class. In connection with this offering, our capital stock will be redeemed and exchanged, and at the time of the completion of this offering, our authorized capital stock will consist of:

•

41,000,000 shares of Class A common stock, par value $.01 per share;



•

25,000,000 shares of Class B common stock, par value $.01 per share; and



•

10,000,000 shares of preferred stock, par value $.01 per share.

We will not be authorized to issue additional shares of Class B common stock, except as dividends or distributions on outstanding shares of Class B common stock.

        After this offering there will be 8,557,177 shares of Class A common stock outstanding and 11,442,400 shares of Class B common stock outstanding, without taking into account the exercise of the underwriters' over-allotment option. The exercise of the underwriters' over-allotment option to purchase 1,191,176 shares of Class B common stock would have the effect of converting the Class B shares sold into an equal number of shares of Class A common stock. At the completion of this offering, no shares of preferred stock will be outstanding.

Common Stock

Voting Rights

        The holders of Class A common stock and Class B common stock have identical rights, except with respect to voting rights. Holders of Class A common stock are entitled to one vote per share, while holders of Class B common stock are entitled to two votes per share on all matters to be voted on by our common stockholders. The affirmative vote of 80% of the total votes entitled to be cast by the holders of our Class A and Class B common stock, voting together as a single voting group, is required in order to amend the provisions of our certificate of incorporation relating to: (1) the composition of our board of directors and the election of directors; (2) calling and holding meetings of our stockholders; (3) procedures for amending our bylaws; and (4) circumstances in which the vote of a supermajority of our stockholders is necessary in order for action to be taken. The affirmative vote of a majority of the total votes entitled to be cast by the holders of our Class A and Class B common stock, voting together as a single voting group, is required in order to amend the provisions of our certificate of incorporation relating to other matters, or to approve a merger, share exchange, sale of all of our property or our dissolution. Except as otherwise provided in our certificate of incorporation, all other matters to be voted on by stockholders must be approved by a majority of the votes to be cast on the matter by the holders of our Class A and Class B common stock present in person or represented by proxy, voting together as a single voting group, at a meeting at which a quorum is present, subject to any voting rights granted to holders of any outstanding shares of preferred stock. Holders of our common stock will not have the right to cumulate votes in elections of directors.

Rights on Liquidation; No Pre-emptive Rights

        In the event of our liquidation, dissolution or winding up, holders of our Class A and Class B common stock, treated as a single class for this purpose, will be entitled to their proportionate

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share of any assets in accordance with each holder's holdings remaining after payment of liabilities and any amounts due to other claimants, including the holders of any outstanding shares of preferred stock. Holders of our common stock have no preemptive rights and no right to convert or exchange their common stock into any other securities, other than the conversion of Class B common stock into Class A common stock, as described under "—Conversion of Class B Common Stock", below. No redemption or sinking fund provisions will apply to our common stock. All outstanding shares of common stock are, and all shares of common stock to be outstanding upon completion of this offering will be, fully paid and non-assessable.

Right to Receive Dividends; Stock Dividends, Splits and Reclassifications

        Holders of Class A common stock and Class B common stock will share equally on a per share basis in any dividend declared by our board of directors, subject to any preferential rights of holders of any outstanding shares of preferred stock. Dividends payable in shares of common stock shall be payable in a manner which retains the relative voting power of outstanding shares of Class A common stock and Class B common stock. If the Class A common stock or Class B common stock is split or reclassified, the shares of Class B common stock or Class A common stock, as the case may be, shall also be split or reclassified so that the respective numbers of shares of Class A common stock and Class B common stock outstanding immediately following such split or reclassification shall bear the same relationship to each other as prior to such split or reclassification such that the relative voting rights of the two classes of common stock remain the same.

Conversion of Class B Common Stock

        In the event of the transfer, by sale or other means, of a share of Class B common stock to a person or entity that is not a subsidiary or affiliate of AIP/BI, such share will convert automatically into one share of Class A common stock. A holder of Class B common stock may, at its option, at any time convert all or any portion of its shares of Class B common stock into an equal number of shares of Class A common stock.

Preferred Stock

        Our certificate of incorporation will authorize our board of directors, without stockholder approval, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions granted to or imposed upon the preferred stock, including voting rights, dividend rights, conversion rights, terms of redemption, liquidation preference, sinking fund terms, subscription rights and the number of shares constituting any series or the designation of a series. Our board of directors can issue preferred stock with voting and conversion rights that could adversely affect the voting power of the holders of common stock, without stockholder approval. No shares of preferred stock are currently outstanding and we have no present plan to issue any shares of preferred stock.

Classified Board of Directors

        Our certificate of incorporation will provide for our board to be divided into three classes of directors, as nearly equal in number as possible, serving staggered terms. Approximately one-third of our board will be elected each year. See "Management—Composition of the Board of Directors." Directors serving on our board can only be removed for cause.

        The provision for a classified board could prevent a party that acquires control of a majority of the voting power of our outstanding stock from obtaining control of our board until the second annual stockholders meeting following the date the acquiror obtains the controlling interest. The classified board provision could have the effect of discouraging a potential acquiror from making a

85

tender offer for our shares or otherwise attempting to obtain control of us and could increase the likelihood that our incumbent directors will retain their positions.

        We believe that a classified board will help to assure the continuity and stability of our board and our business strategies and policies as determined by our board, because a majority of the directors at any given time will have prior experience on our board. The classified board provision should also help to ensure that our board, if confronted with an unsolicited proposal from a third party that has acquired a block of our voting stock will have sufficient time to review the proposal and appropriate alternatives and to seek the best available result for all stockholders.

Business Combinations

        We are governed by Section 203 of the General Corporation Law of the State of Delaware. Section 203, subject to certain exceptions, prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years following the time that the stockholder became an interested stockholder, unless:

•

prior to such time, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;



•

upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding specified shares; or



•

at or subsequent to such time, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66²/3% of the outstanding voting stock that is not owned by the interested stockholder.

        The application of Section 203 may limit the ability of stockholders to approve a transaction that they may deem to be in their best interests.

        In general, Section 203 defines "business combination" to include:

•

any merger or consolidation involving the corporation and the interested stockholder;



•

any sale, lease, exchange, mortgage, pledge, transfer or other disposition of 10% or more of the assets of the corporation to or with the interested stockholder;



•

subject to certain exceptions, any transaction which results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;



•

any transaction involving the corporation which has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or



•

the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

        In general, Section 203 defines an "interested stockholder" as any person that is:

•

the owner of 15% or more of the outstanding voting stock of the corporation;



•

an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation at any time within three years immediately prior to the relevant date; and



•

the affiliates and associates of the above.

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        Under specific circumstances, Section 203 makes it more difficult for an "interested stockholder" to effect various business combinations with a corporation for a three-year period, although the stockholders may, by adopting an amendment to the corporation's certificate of incorporation or bylaws, elect not to be governed by this section, effective twelve months after adoption.

        Our certificate of incorporation and bylaws will not exclude us from the restrictions imposed under Section 203. We anticipate that the provisions of Section 203 may encourage companies interested in acquiring us to negotiate in advance with our board of directors since the stockholder approval requirement would be avoided if a majority of the directors then in office approve either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder.

Number of Directors; Removal; Vacancies

        Our bylaws will provide that the number of directors shall be fixed by our board of directors. The size of our board is currently fixed at nine directors. After this offering our board of directors will be divided into three staggered classes, with as nearly equal a number of directors in each class as possible. See "Management—Composition of the Board of Directors."

        Pursuant to our certificate of incorporation and bylaws, each director will serve until the next annual meeting for the year in which his term expires and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation or removal. Directors may be removed from office only for cause and by the affirmative vote of holders of at least a majority of the voting power of all issued and outstanding capital stock.

        Our certificate of incorporation will further provide that vacancies resulting from newly created directorships in our board may only be filled by a majority of our board, provided that a quorum is present. Any other vacancy may be filled by a majority of our board, even if less than a quorum is present. Any director so chosen will hold office until the next election of the class for which such director was chosen.

Stockholder Action; Special Meetings

        Our certificate of incorporation will provide that stockholder action can be taken at an annual or special meeting of stockholders, and that only holders of Class B common stock will have the right to act by written consent. Except as otherwise required by law, special meetings of the stockholders can only be called pursuant to a notice given by or at the direction of the chairman of our board, our president or our secretary at the written request of our board, a committee of our board or the holders of a majority of the Class B common stock.

Stockholder Proposals

        At an annual meeting of stockholders, only business that is properly brought before the meeting will be conducted or considered. To be properly brought before an annual meeting of stockholders, business must be specified in the notice of the meeting (or any supplement to that notice), brought before the meeting by or at the direction of the directors (or any duly authorized committee of the board of directors), or properly brought before the meeting by a stockholder. To properly nominate a director, a stockholder must:

•

be a stockholder of record on the date of the giving of the notice for the meeting;



•

be entitled to vote at the meeting; and



•

have given timely written notice of the business to our secretary.

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        To be timely, a stockholder's notice must be delivered to or mailed and received at our principal executive offices not less than 90 nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting, provided, however, in the event that the annual meeting is not within 30 days of such anniversary date, notice by the stockholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever first occurs.

        A stockholder's notice must set forth, among other things, as to each matter the stockholder proposes to bring before the meeting:

•

a brief description of the business proposed to be brought before the meeting and the reason for conducting such business;



•

the name and record address of such stockholder;



•

the class or series and number of shares that are owned of record or beneficially by the stockholder;



•

a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business; and



•

a representation that such stockholder intends to appear in person or by proxy at the meeting to bring such business before the meeting.

        Similarly, at a special meeting of stockholders, only such business as is properly brought before the meeting will be conducted or considered. To be properly brought before a special meeting, business must be specified in the notice of the meeting (or any supplement to that notice) given by or at the direction of the chairman of our board, our president or our secretary at the written request of our board, a committee of our board or the holders of a majority of the Class B common stock.

Nomination of Candidates for Election to Our Board

        Under our bylaws, only persons that are properly nominated will be eligible for election to be members of our board. To be properly nominated, a director candidate must be nominated at an annual meeting of the stockholders or at any special meeting of stockholders called for the purpose of electing directors by or at the direction of our board or a committee of our board, or properly nominated by a stockholder. To properly nominate a director, a stockholder must:

•

be a stockholder of record on the date of the giving of the notice for the meeting;



•

be entitled to vote at the meeting; and



•

have given timely written notice of the business to our secretary.

        To be timely, a stockholder's notice must be delivered to or mailed and received at our principal executive offices (a) not less than 90 nor more than 120 days prior to the anniversary date of the immediately preceding annual meeting, provided, however, in the event that the annual meeting is not within 30 days prior or subsequent to such anniversary date, notice by the stockholder to be timely must be so received not later than the close of business on the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever first occurs; and (b) in the case of a special meeting no later than the close of business on the tenth day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs.

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        To be in proper written form, such stockholder's notice must include, among other things,

•

as to each person whom the stockholder proposes to nominate for election as a director:



•

the name, age, business address and residence address of the person;



•

the principal occupation or employment of the person;



•

the class or series and number of shares of our capital stock that are owned beneficially or of record by the person; and



•

any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated thereunder; and



•

as to the stockholder giving the notice:



•

the name and record address of such stockholder;



•

the class or series and number of shares of our capital stock that are owned beneficially or of record by such stockholder;



•

a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder;



•

a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice; and



•

any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.

Amendment of Bylaws

        Except as otherwise provided by law, our certificate of incorporation or our bylaws, our bylaws may be amended, altered or repealed at a meeting of the stockholders provided that notice of such amendment, alteration or repeal is contained in the notice of such meeting or a meeting of our board of directors.

        All such amendments must be approved by either the holders of 80% of the combined voting power of the Class A and Class B common stock or by a majority of the entire board of directors then in office.

Transfer Agent and Registrar

        We have appointed LaSalle Bank N.A. as the transfer agent and registrar for our Class A common stock.

Listing

        We have applied for the quotation of our Class A common stock on the Nasdaq National Market under the symbol "BUCY."

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SHARES ELIGIBLE FOR FUTURE SALE

        No public market for our Class A common stock existed before this offering. Future sales of substantial amounts of our Class A common stock in the public market could cause our prevailing market prices to decline. A large number of our shares of Class A common stock outstanding will not be available for sale shortly after this offering because of contractual and legal restrictions on resale as described below. Sales of substantial amounts of our Class A common stock in the public market after these restrictions lapse, and the potential for such sales, could depress the prevailing market price of our Class A common stock and limit our ability to raise equity capital in the future.

        Upon completion of this offering, we will have outstanding an aggregate of 8,557,177 shares of Class A common stock, assuming no exercise of the underwriters' over-allotment option. We will also have outstanding 11,442,400 shares of Class B common stock, each of which is automatically convertible to a share of Class A common stock upon its transfer to a person or entity that is not a subsidiary or affiliate of AIP/BI or upon an election to convert such Class B shares by a holder of Class B common stock. All of the shares sold in this offering, other than those sold to our affiliates, will be freely tradable without restriction or further registration under the Securities Act. The remaining 616,000 shares of Class A common stock and 11,442,400 shares of Class B common stock held by existing stockholders are restricted securities. Subject to the restrictions on transfer contained in the lock-up agreements described in "Underwriting," restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under the Securities Act.

Lock-Up Agreements

        Our executive officers, directors, employee stockholders and AIP/BI, which collectively hold substantially all of our Class A and Class B common stock have agreed not to transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock, for a period of 180 days after the date of the final prospectus for this offering. Transfers or dispositions can be made sooner with the prior written consent of Goldman, Sachs & Co.

Rule 144

        In general, under Rule 144, beginning 90 days after the date of the final prospectus for this offering, a person who has beneficially owned shares of our common stock for at least one year would be entitled to sell within any three-month period a number of shares that does not exceed the greater of:

•

1% of the shares of common stock then outstanding, which will equal approximately 199,996 shares immediately after this offering; or



•

the average weekly trading volume of the Class A common stock on the Nasdaq National Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

        We believe that holders of Class A and Class B common stock issued to them in exchange for shares of our predecessor common equity prior to our recapitalization in contemplation of this offering should be able to count the period of time during which they held such predecessor common equity for purposes of determining the length of time they have held our common stock for purposes of Rule 144. Sales under Rule 144 must comply with manner of sale provisions and post-sale notice requirements, and may only occur if information about us is publicly available.

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Rule 144(k)

        Under Rule 144(k), a person who has not been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, is entitled to sell those shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. Therefore, unless otherwise restricted, shares eligible for sale under Rule 144(k) may be sold immediately upon the completion of this offering. Substantially all of the shares of our Class A and Class B common stock outstanding prior to this offering are held by AIP/BI or other individuals who are our affiliates, and although many of such shares have been held for at least two years, such shares cannot be sold by any such holder pursuant to Rule 144(k) until 90 days after such holder ceases to be an affiliate.

Registration Rights

        Prior to the completion of this offering, we will be a party to a Registration Rights Agreement which will amend and restate our Stockholders Agreement, as amended, dated as of March 17, 1998, with AIP/BI and other stockholders which we refer to, together with AIP/BI, as the Stockholders. All of the Stockholders are current or former members of our management or board of directors or current or former employees of AIP. The holders of a majority of shares held by AIP/BI and its affiliates will have unlimited demand registration rights on Forms S-2 or S-3 and up to three demand registrations on Form S-1, in all cases subject to customary conditions, including a requirement that such demands cover a minimum number of shares. Other Stockholders will have "piggy-back" registration rights entitling them to include their shares in demand registrations, subject to customary cutback in the case of underwritten offerings reduced in size at the request of the managing underwriter. Pursuant to a demand registration, AIP/BI may only demand the registration of at least two million shares, or fewer shares if all of AIP/BI's shares are requested to be registered, provided that such number of shares cannot be sold pursuant to Rule 144. The agreement also permits the Stockholders to join in registrations of shares by us, subject to Stockholder cutback in the case of underwritten offerings reduced in size at the request of the managing underwriter. We are responsible for the registration expenses in connection with the performance of our obligations under the Registration Rights Agreement. The Registration Rights Agreement will also provide for indemnification and contribution by us for the benefit of the Stockholders and, in limited situations, by the Stockholders for the benefit of us and any underwriters with respect to the information included in any registration statement, prospectus or related document. The Registration Rights Agreement will also contain provisions that can limit the ability of the other Stockholders to sell their shares during the pendency of and for a limited time after the completion of registered offerings triggered or joined by AIP/BI.

Stock Options

        Upon the completion of this offering, we intend to file a registration statement on Form S-8 under the Securities Act registering approximately 1,802,400 shares of our Class A common stock, covering 802,400 shares issuable pursuant to options previously granted under our 1998 Stock Option Plan and approximately 1,000,000 shares reserved for issuance under our 2004 Equity Incentive Plan. The registration statement will become effective upon filing. Accordingly, shares of our Class A common stock registered under the registration statement on Form S-8 will be available for sale in the open market immediately thereafter, after complying with Rule 144 volume limitations applicable to affiliates and with applicable 180-day lock-up agreements.

91

DESCRIPTION OF INDEBTEDNESS

Our New Senior Secured Credit Facility

        We have a commitment from, and are currently negotiating the terms of a new senior secured credit facility, which we refer to as the new senior secured credit facility, with, Goldman Sachs Credit Partners L.P. and GMAC Commercial Finance LLC as lenders. The commitments are subject to customary and objective conditions, including achievement of credit ratings, absence of material adverse changes to us or our results of operations, as well as to the completion of this offering. We expect to enter into the new senior secured credit facility concurrently with the closing of this offering. We intend to use amounts borrowed under our new senior secured credit facility, along with the net proceeds of this offering, to, among other uses, redeem our Senior Notes, retire our existing senior secured credit facility, to pay deferred interest due on the Senior Notes held by Holdings and to pay deferred fees and other amounts due pursuant to the Management Services Agreement with AIP, which will be terminated prior to the completion of this offering. Although the specific terms of the new senior secured credit facility are being negotiated, we expect that the new senior secured credit facility will provide us with a senior secured term loan of $100 million and a senior secured revolving credit facility of up to $50 million. Borrowings under the revolving portion of the facility are expected to be subject to a borrowing base formula based on the value of eligible receivables and inventory.

        We expect that the new senior secured credit facility will contain covenants limiting the discretion of management with respect to key business matters and will place significant restrictions on, among other things, our ability to incur additional indebtedness, create liens or other encumbrances, make certain payments or investments, loans and guarantees, and sell or otherwise dispose of assets and merge or consolidate with another entity. We expect that substantially all of our domestic assets and the receivables and inventory of our Canadian subsidiary will be pledged as collateral under the new senior secured credit facility. In addition, we anticipate that the outstanding capital stock of our domestic subsidiaries as well as the majority of the capital stock of our foreign subsidiaries will be pledged as collateral. We expect that interest under the facility's tranches will accrue at floating rates calculated at spreads over LIBOR and/or a money center bank's prime rate.

        We anticipate that the new senior secured facility will include terms which will, among other things:

•

require us to comply with certain financial covenants, including to maintain:



•

minimum levels of availability under the revolving portion of the new senior secured credit facility;



•

a maximum leverage ratio;



•

a minimum fixed charge coverage ratio; and



•

minimum levels of EBITDA (to be defined in the agreement).



•

limit our ability to:



•

incur liens;



•

merge, consolidate or dispose of assets;



•

make loans and investments;



•

incur indebtedness;



•

engage in certain transactions with affiliates;



•

incur contingent obligations; enter into joint ventures; enter into lease agreements;



•

pay dividends above certain specified amounts and make other distributions;

92

•

change our business; and



•

make capital expenditures.



•

require us to repay our debt with:



•

proceeds from debt and equity issuances;



•

proceeds of asset sales; and



•

cash flow in excess of specified levels.

        The covenants will be subject to exceptions, qualifications and limitations.

Our Existing Senior Secured Credit Facility; Senior Notes

        We have a senior secured credit facility with GMAC Commercial Finance LLC (as successor in interest to GMAC Business Credit LLC), which we refer to as the existing senior secured credit facility, which as of March 31, 2004 provides us with a $73.0 million senior secured credit facility and expires on January 8, 2005. Substantially all of our domestic assets and the receivables and inventory of our Canadian subsidiary are pledged as collateral under the existing senior secured credit facility. In addition, all of our outstanding capital stock and the outstanding capital stock of our domestic subsidiaries as well as 65% of the capital stock of our foreign subsidiaries are pledged as collateral. Upon the completion of this offering, we intend to satisfy all of our obligations under our existing senior secured credit facility, and retire the facility, by drawing down on our new senior secured facility.

        We currently have outstanding $150 million of our Senior Notes. During 2000, Holdings acquired approximately $75.6 million of our Senior Notes. Holdings agreed to defer the receipt of interest on its Senior Notes through September 15, 2003. Holdings received current interest payable on the Senior Notes held by them on March 15, 2004 from the proceeds of the term loan portion of our existing senior secured credit facility. We intend to retire all $150 million of our Senior Notes (including the applicable call premium) and to pay deferred interest due on the Senior Notes held by Holdings with the proceeds of this offering and from borrowings under our new senior secured credit facility.

        Both our existing senior secured credit facility and the indenture governing the Senior Notes, or the Senior Notes Indenture, contain covenants and cross default provisions. At March 31, 2004, we were in compliance with all covenants under our existing senior secured credit facility and the Senior Notes Indenture.

Other Indebtedness

        On April 30, 2002, Bucyrus Canada Limited, a wholly-owned subsidiary of us, entered into a new C$3.5 million mortgage loan. The term of the mortgage loan is 15 years at an initial rate of 7.55% which is fixed for the first five years. The balance outstanding at December 31, 2003 was C$3.3 million. The mortgage loan is collateralized by the land, buildings and certain building attachments owned by Bucyrus Canada Limited. As of the date of this prospectus, Bucyrus Canada Limited is in compliance with all of the mortgage loan terms. The net book value of this collateral at December 31, 2003 was C$4.1 million. Previously, Bucyrus Canada Limited had a C$15 million credit facility with The Bank of Nova Scotia. On March 7, 2002, the outstanding balance of C$9.1 million under the C$10 million revolving term loan portion of this credit facility was paid in full with proceeds from the existing senior secured credit facility. The balance outstanding under the revolving term loan portion at December 31, 2001 was C$9.1 million. On April 30, 2002, Bucyrus Canada Limited paid the remaining non-revolving term loan portion of the credit facility in full with proceeds from the new mortgage loan. The balance outstanding under the non-revolving term loan portion at December 31, 2001 was C$4.0 million. The new mortgage loan contains a number of financial covenants which, among other items, require Bucyrus Canada Limited to maintain certain financial ratios on an annual basis. At December 31, 2003, Bucyrus Canada Limited was in compliance with all applicable covenants.

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UNDERWRITING

        Bucyrus, Bucyrus Holdings, LLC, AIP/BI LLC and the underwriters named below have entered into an underwriting agreement with respect to the shares of Class A common stock being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of shares of Class A common stock indicated in the following table. Goldman, Sachs & Co. is the representative of the underwriters.

Underwriters			Number of Shares
	Goldman, Sachs & Co.
	Lehman Brothers Inc.
	Legg Mason Wood Walker, Incorporated
		Total	7,941,177

        The underwriters are committed to take and pay for all of the shares of Class A common stock being offered, if any are taken, other than the shares covered by the option described below, unless and until this option is exercised.

        If the underwriters sell more shares than the total number set forth in the table above, the underwriters have an option to buy up to an additional 1,191,176 shares of common stock from AIP/BI LLC to cover such sales. They may exercise that option for 30 days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.

        The following tables show the per share and total underwriting discounts and commissions to be paid to the underwriters by Bucyrus and AIP/BI LLC. Such amounts are shown assuming both no exercise and full exercise of the underwriters' option to purchase 1,191,176 additional shares.

Paid by Bucyrus

	No Exercise	Full Exercise
Per Share	$	$
Total	$	$

Paid by AIP/BI LLC

	No Exercise	Full Exercise
Per Share	$	$
Total	$	$

        Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be sold at a discount of up to $             per share from the initial public offering price. Any such securities dealers may resell any shares purchased from the underwriters to certain other brokers or dealers at a discount of up to $             per share from the initial public offering price. If all the shares of Class A common stock are not sold at the initial public offering price, the representatives may change the offering price and the other selling terms.

        Bucyrus, AIP/BI LLC, Bucyrus' officers, directors and employee stockholders have agreed with the underwriters not to dispose of or hedge any of their common stock or securities convertible into or exchangeable for shares of common stock during the period from the date of the final prospectus for this offering continuing through the date 180 days after the date of such prospectus, except with the prior written consent of the representatives. This agreement does not apply to any

94

existing employee benefit plans. See "Shares Eligible for Future Sale" for a discussion of certain transfer restrictions.

        Prior to the offering, there has been no public market for the Class A common stock. The initial public offering price has been negotiated among the company and the representatives. Among the factors to be considered in determining the initial public offering price of the Class A common stock, in addition to prevailing market conditions, will be Bucyrus' historical performance, estimates of its business potential and earnings prospects, an assessment of its management and the consideration of the above factors in relation to market valuation of companies in related businesses.

        Application has been made to list the Class A common stock on the Nasdaq National Market under the symbol "BUCY."

        In connection with the offering, the underwriters may purchase and sell shares of Class A common stock in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Shorts sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. "Covered" short sales are sales made in an amount not greater than the underwriters' option to purchase additional shares from AIP/BI LLC in the offering. The underwriters may close out any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares pursuant to the option granted to them. "Naked" short sales are any sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of Class A common stock made by the underwriters in the open market prior to the completion of the offering.

        The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

        Purchases to cover a short position and stabilizing transactions may have the effect of preventing or retarding a decline in the market price of the company's stock, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the common stock. As a result, the price of the common stock may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued at any time. These transactions may be effected on the NASDAQ NMS, in the over-the-counter market or otherwise.

        Each underwriter has represented, warranted and agreed that: (i) it has not offered or sold and, prior to the expiry of a period of six months from the date of the closing of this offering, will not offer or sell any Class A common stock to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (ii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial

95

Services and Markets Act 2000, or FSMA,) received by it in connection with the issue or sale of any shares in circumstances in which section 21(1) of the FSMA does not apply to the Issuer; and (iii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the shares of Class A common stock in, from or otherwise involving the United Kingdom.

        The Class A common stock may not be offered or sold, transferred or delivered, as part of their initial distribution or at any time thereafter, directly or indirectly, to any individual or legal entity in the Netherlands other than to individuals or legal entities who or which trade or invest in securities in the conduct of their profession or trade, which includes banks, securities intermediaries, insurance companies, pension funds, other institutional investors and commercial enterprises which, as an ancillary activity, regularly trade or invest in securities.

        The Class A common stock may not be offered or sold by means of any document other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent, or in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong, and no advertisement, invitation or document relating to the common stock may be issued, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to shares of common stock which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made thereunder.

        The prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation or subscription or purchase, of the shares of common stock may not be circulated or distributed, nor may the shares of common stock be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than under circumstances in which such offer, sale or invitation does not constitute an offer or sale, or invitation for subscription or purchase, of the shares of common stock to the public in Singapore.

        Each underwriter has acknowledged and agreed that the securities have not been registered under the Securities and Exchange law of Japan and are not being offered or sold and may not be offered or sold, directly or indirectly, in Japan or to or for the account of any resident of Japan, except (i) pursuant to an exemption from the registration requirements of the Securities and Exchange Law of Japan and (ii) in compliance with any other applicable requirements of Japanese law.

        The underwriters do not expect sales to discretionary accounts to exceed five percent of the total number of shares offered.

        Bucyrus estimates that its share of the total expenses of the offering, excluding underwriting discounts and commissions, will be approximately $3 million.

        Bucyrus, Holdings and AIP/BI have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act of 1933.

        The underwriters' obligations to purchase shares of Class A common stock in the offering are contingent upon, among other things, Bucyrus' entry into the new senior secured credit facility.

        Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment and commercial banking services for Bucyrus, for which they received or will receive customary fees and expenses. An

96

affiliate of Goldman, Sachs & Co., the lead manager of this offering, is the lead arranger and syndication agent for Bucyrus' new senior secured credit facility.

VALIDITY OF CLASS A COMMON STOCK

        The validity of the shares of Class A common stock being offered will be passed upon for Bucyrus by Skadden, Arps, Slate, Meagher & Flom LLP, New York, and for the Underwriters by Sullivan & Cromwell LLP, New York.

EXPERTS

Independent Auditors

        The consolidated financial statements of Bucyrus International, Inc. and subsidiaries as of and for the years ended December 31, 2003 and 2002, included in this prospectus and the related financial statement schedules included elsewhere in the registration statement have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein (which report expresses an unqualified opinion and includes explanatory paragraphs referring to (i) the adoption on January 1, 2002, of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, and (ii) the application of procedures relating to certain disclosures, adjustments and reclassifications of financial statement amounts related to the 2001 financial statements that were audited by other auditors who have ceased operations and for which they have expressed no opinion or other form of assurance other than with respect to such disclosures and reclassifications) and have been so included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

        The financial statements of Bucyrus and our subsidiaries for the year ended December 31, 2001 were audited by Arthur Andersen LLP, independent accountants, as indicated in their reports with respect thereto, and are included herein in reliance upon the authority of said firm as experts in accounting and auditing. In June 2002, Arthur Andersen LLP was convicted of federal obstruction of justice charges. As a result of its conviction, Arthur Andersen has ceased operations and is no longer in a position to reissue its audit reports or to provide consent to include financial statements reported on by it in this prospectus. Because Arthur Andersen has not reissued its reports and because we are not able to obtain a consent from Arthur Andersen, you will be unable to sue Arthur Andersen for material misstatements or omissions, if any, in this prospectus, including the financial statements covered by its previously issued reports. Even if you have a basis for asserting a remedy against, or seeking recovery from, Arthur Andersen, we believe that it is unlikely that you would be able to recover damages from Arthur Andersen.

Change in Independent Accountants

        On June 24, 2002, we filed a Current Report on Form 8-K (the "Current Report") to report the dismissal of Arthur Andersen LLP ("Andersen") as our independent public accountants and the engagement of Deloitte & Touche LLP to serve as our independent public accountants for the fiscal year ended December 31, 2002. This decision was approved by our board of directors. As reported in the Current Report (i) there were no disagreements between us and Andersen on any matter of accounting principle or practice, financial statement disclosure or auditing scope or procedure which, if not resolved to Andersen's satisfaction, would have caused Andersen to make reference to the subject matter in connection with Andersen's report on our consolidated financial statements for such years; and (ii) there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

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WHERE YOU CAN FIND MORE INFORMATION

        We have filed with the SEC a registration statement on Form S-1 under the Securities Act of 1933 with respect to the common stock we are offering. This prospectus contains all information about Bucyrus International, Inc. and our Class A common stock that may be material to an investor in this offering. The registration statement includes exhibits to which you should refer for additional information about us.

        You may inspect a copy of the registration statement and the exhibits and schedules to the registration statement without charge at the offices of the SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain copies of all or any part of the registration statement from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549 upon the payment of the prescribed fees. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains a web site at www.sec.gov that contains reports, proxy and information statements and other information regarding registrants like us that file electronically with the SEC. You can also inspect our registration statement on this web site.

        We currently file annual, quarterly and current reports and certain other information with the SEC. After we have completed this offering, we will continue to file such reports and information with the SEC and will, in addition, file proxy statements with the SEC. We intend to make these filings available on our website free of charge once this offering is completed. You may read and copy any reports, statements or other information on file at the SEC's public reference room. You can also request copies of these documents, for a copying fee, by writing to the SEC, or you can review these documents on the SEC's web site, as described above. In addition, we will provide electronic or paper copies of our filings free of charge upon request.

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INDEX TO FINANCIAL STATEMENTS

Consolidated Condensed Statements of Operations for the three months ended March 31, 2003 and 2004	F-2
Consolidated Condensed Statements of Comprehensive Income (Loss) for the three months ended March 31, 2003 and 2004	F-3
Consolidated Condensed Balance Sheets as of December 31, 2003 and March 31, 2004	F-4
Consolidated Condensed Statements of Cash Flows for the three months ended March 31, 2003 and 2004	F-5
Notes to Consolidated Condensed Financial Statements	F-6
Consolidated Statements of Operations for the years ended December 31, 2001, 2002 and 2003	F-17
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2001, 2002 and 2003	F-18
Consolidated Balance Sheets as of December 31, 2002 and 2003	F-19
Consolidated Statements of Common Shareholders' Investment (Deficit) for the years ended December 31, 2001, 2002 and 2003	F-21
Consolidated Statements of Cash Flows for the years ended December 31, 2001, 2002 and 2003	F-22
Notes to Consolidated Financial Statements	F-24
Report of Independent Registered Public Accounting Firm	F-59
Report of Independent Public Accountants	F-61

F-1

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)

(Dollars in Thousands, Except Per Share Amounts)

			Quarters Ended March 31,
			2003			2004
Sales			$	60,882		$	97,128
Cost of products sold				46,324			77,471
		Gross profit		14,558			19,657
Selling, general and administrative expenses				8,791			14,056
Research and development expenses				1,154			1,354
Amortization of intangible assets				412			412
		Operating earnings		4,201			3,835
Interest expense				4,523			4,125
Other (income) expense—net				204			345
Loss before income taxes				(526	)		(635	)
Income tax expense				806			1,380
Net loss			$	(1,332	)	$	(2,015	)
Basic and diluted loss per share data:
	Net loss per share		$	(.12	)	$	(.17	)
	Weighted average shares			11,484,800			12,058,400

See notes to consolidated condensed financial statements.

F-2

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF

COMPREHENSIVE INCOME (LOSS) (Unaudited)

(Dollars in Thousands)

		Quarters Ended March 31,
		2003			2004
Net loss		$	(1,332	)	$	(2,015	)
Other comprehensive income (loss)—
	Foreign currency translation adjustments		1,576			(995	)
Comprehensive income (loss)		$	244		$	(3,010	)

See notes to consolidated condensed financial statements.

F-3

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)

(Dollars in Thousands, Except Per Share Amounts)

		December 31, 2003			March 31, 2004
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents	$	6,075		$	4,450
	Receivables—net		73,111			60,603
	Inventories		115,898			121,296
	Prepaid expenses and other current assets		8,209			8,598
	Total Current Assets		203,293			194,947
OTHER ASSETS:
	Restricted funds on deposit		578			583
	Goodwill		55,860			55,860
	Intangible assets—net		35,724			35,312
	Other assets		9,255			7,888
			101,417			99,643
PROPERTY, PLANT AND EQUIPMENT:
	Cost		112,955			113,483
	Less accumulated depreciation		(55,522	)		(58,273	)
			57,433			55,210
		$	362,143		$	349,800
LIABILITIES AND COMMON SHAREHOLDERS' INVESTMENT (DEFICIT)
CURRENT LIABILITIES:
	Accounts payable and accrued expenses	$	59,591		$	59,475
	Liabilities to customers on uncompleted contracts and warranties		19,030			9,131
	Income taxes		4,314			4,977
	Borrowings under senior secured revolving credit facility and other short-term obligations		37,420			35,318
	Current maturities of long-term debt		376			317
	Total Current Liabilities		120,731			109,218
LONG-TERM LIABILITIES:
	Liabilities to customers on uncompleted contracts and warranties		800			800
	Postretirement benefits		13,130			13,274
	Deferred expenses, pension and other		32,449			32,427
	Payable to American Industrial Partners		5,527			5,665
	Interest payable to Holdings		25,810			23,660
			77,716			75,826
LONG-TERM DEBT, less current maturities (including $75,635 of Senior Notes held by Holdings)			153,973			153,895
COMMON SHAREHOLDERS' INVESTMENT (DEFICIT):
	Common stock—par value $.01 per share, authorized 13,600,000 shares, issued 12,130,800 shares		121			121
	Additional paid-in capital		149,472			153,620
	Treasury stock—72,400 shares, at cost		(851	)		(851	)
	Accumulated deficit		(104,783	)		(106,798	)
	Accumulated other comprehensive loss		(34,236	)		(35,231	)
			9,723			10,861
		$	362,143		$	349,800

See notes to consolidated condensed financial statements.

F-4

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in Thousands)

	Quarters Ended March 31,
	2003			2004
Net Cash Provided By (Used In) Operating Activities	$	(78	)	$	1,455
Cash Flows From Investing Activities
(Increase) decrease in restricted funds on deposit		72			(5	)
Purchases of property, plant and equipment		(389	)		(704	)
Proceeds from sale of property, plant and equipment		15			8
Net cash used in investing activities		(302	)		(701	)
Cash Flows From Financing Activities
Net proceeds from (repayments of) revolving credit facilities		2,735			(2,365	)
Net increase (decrease) in long-term debt and other bank borrowings		(480	)		127
Payment of refinancing expenses		(976	)		(166	)
Net cash provided by (used in) financing activities		1,279			(2,404	)
Effect of exchange rate changes on cash		86			25
Net increase (decrease) in cash and cash equivalents		985			(1,625	)
Cash and cash equivalents at beginning of period		4,189			6,075
Cash and cash equivalents at end of period	$	5,174		$	4,450

Supplemental Disclosures of Cash Flow Information

		2003		2004
Cash paid during the period for:
	Interest	$	4,421	$	7,836
	Income taxes—net of refunds		702		661

See notes to consolidated condensed financial statements.

F-5

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)

1.

In the opinion of Bucyrus International, Inc. (the "Company"), the consolidated condensed financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial results for the interim periods. Certain items are included in these statements based on estimates for the entire year. The Company's operations are classified as one operating segment. The Company is currently substantially wholly-owned by Bucyrus Holdings, LLC ("Holdings").

2.

Certain notes and other information have been condensed or omitted from these interim consolidated condensed financial statements. Therefore, these statements should be read in conjunction with the Company's audited consolidated financial statements for the year ended December 31, 2003 and the related notes included elsewhere in this prospectus.

On June 9, 2004, the Company effected an 8-for-1 stock split of its common stock. All references in the accompanying consolidated financial statements and notes thereto to earnings per share and the number of shares have been retroactively restated to reflect this stock split.

3.

Inventories consist of the following:

	December 31, 2003		March 31, 2004
	(Dollars in Thousands)
Raw materials and parts	$	11,655	$	11,451
Work in process		20,433		20,443
Finished products (primarily replacement parts)		83,810		89,402
	$	115,898	$	121,296

4.

Basic and diluted net loss per share of common stock were computed by dividing net loss by the weighted average number of shares of common stock outstanding. The shares outstanding used to compute the diluted loss per share for the quarters ended March 31, 2003 and 2004 exclude outstanding options to purchase 1,596,000 and 1,018,000 shares, respectively, of the Company's common stock. The options were excluded because their inclusion would have been antidilutive.

5.

The Company accounts for stock options in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," as allowed by Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"). The following table illustrates the effect on net loss and net loss per share as if

F-6

the fair value-based method provided by SFAS 123 had been applied for all outstanding and unvested awards in each period:

			Quarters Ended March 31,
			2003			2004
			(Dollars in Thousands, Except Per Share Amounts)
Reported net loss			$	(1,332	)	$	(2,015	)
Add: Stock-based employee compensation expense recorded for stock options, net of related tax effects				—			4,148
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects				(72	)		(4	)
Pro forma net earnings (loss)			$	(1,404	)	$	2,129
Net earnings (loss) per share of common stock:
	As reported—basic and diluted		$	(.12	)	$	(.17	)
	Pro forma:
		Basic		(.12	)		.18
		Diluted		(.12	)		.17

6.

Intangible assets consist of the following:

		December 31, 2003					March 31, 2004
		Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization
		(Dollars in Thousands)
Amortized intangible assets:
	Engineering drawings	$	25,500	$	(7,994	)	$	25,500	$	(8,312	)
	Bill of material listings		2,856		(895	)		2,856		(931	)
	Software		2,288		(1,434	)		2,288		(1,492	)
		$	30,644	$	(10,323	)	$	30,644	$	(10,735	)
Unamortized intangible assets:
	Trademarks/Trade names	$	12,436				$	12,436
	Intangible pension asset		2,967					2,967
		$	15,403				$	15,403

F-7

The aggregate intangible amortization expense for the quarters ended March 31, 2004 and 2003 was $412,000. The estimated future amortization expense of intangible assets as of March 31, 2004 is as follows:

	(Dollars in Thousands)
2004 (remaining nine months)	$	1,235
2005		1,647
2006		1,647
2007		1,585
2008		1,418
2009		1,418
Future		10,959
	$	19,909

7.

The Company's operations and properties are subject to a broad range of federal, state, local and foreign laws and regulations relating to environmental matters, including laws and regulations governing discharges into the air and water, the handling and disposal of solid and hazardous substances and wastes, and the remediation of contamination associated with releases of hazardous substances at the Company's facilities and at off-site disposal locations. These laws are complex, change frequently and have tended to become more stringent over time. Future events, such as compliance with more stringent laws or regulations, more vigorous enforcement policies of regulatory agencies or stricter or different interpretations of existing laws, could require additional expenditures by the Company, which may be material.

Environmental problems have not interfered in any material respect with the Company's manufacturing operations to date. The Company believes that its compliance with statutory requirements respecting environmental quality will not materially affect its capital expenditures, earnings or competitive position. The Company has an ongoing program to address any potential environmental problems. While no assurance can be given, the Company believes that expenditures for compliance and remediation will not have a material effect on its capital expenditures, results of operations or competitive position.

The Company recognizes the cost associated with its warranty policies on its products at the time of sale. The amount recognized is based on historical experience. The following is a reconciliation of the changes in accrued warranty costs for the quarters ended March 31, 2003 and 2004:

	Quarters Ended March 31,
	2003			2004
	(Dollars in Thousands)
Balance at January 1	$	3,597		$	4,311
Provision		263			1,256
Charges		(381	)		(544	)
Balance at March 31	$	3,479		$	5,023

F-8

Product Liability

The Company is normally subject to numerous product liability claims, many of which relate to products no longer manufactured by the Company or its subsidiaries, and other claims arising in the ordinary course of business. The Company has insurance covering most of said claims, subject to varying deductibles up to $3,000,000, and has various limits of liability depending on the insurance policy year in question. It is the view of management that the final resolution of said claims and other similar claims which are likely to arise in the future will not individually or in the aggregate have a material effect on the Company's financial position, results of operations or cash flows, although no assurance to that effect can be given.

Asbestos Liability

The Company has been named as a co-defendant in approximately 290 personal injury liability cases alleging damages due to exposure to asbestos and other substances, involving approximately 1,478 plaintiffs. The cases are pending in courts in nine states. In all of these cases, insurance carriers have accepted or are expected to accept defense. These cases are in various pre-trial stages. The Company does not believe that costs associated with these matters will have a material effect on its financial position, results of operations or cash flows, although no assurance to that effect can be given.

Other Litigation

A wholly-owned Australian subsidiary is a defendant in a suit in the Supreme Court of Queensland in Australia, brought on May 5, 2002, relating to a contractual claim. The plaintiff, pursuant to a contract with our subsidiary, agreed to erect a dragline sold by us to a customer for use at its mine site. The plaintiff asserts various contractual claims related to breach of contract damages and other remedies for approximately $Aus 3.6 million related to its contention that it is owed amounts for services rendered under the contract. Our subsidiary has asserted counterclaims against the plaintiff in connection with certain aspects of the work performed. We have established a reserve for our estimate of the resolution of this matter.

8.

Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income," requires the reporting of comprehensive income (loss) in addition to net income (loss) from operations. Comprehensive income (loss) is a more inclusive financial reporting method that includes disclosure of financial information that historically has not been recognized in the calculation of net income (loss). The Company reports comprehensive income (loss) and accumulated other comprehensive loss which includes net loss, foreign currency translation adjustments and minimum pension liability adjustments. Information on accumulated other comprehensive loss is as follows:

	Cumulative Translation Adjustments			Minimum Pension Liability Adjustments			Accumulated Other Comprehensive Loss
	(Dollars in Thousands)
Balance at December 31, 2003	$	(9,028	)	$	(25,208	)	$	(34,236	)
Changes—Quarter ended March 31, 2004		(995	)		—			(995	)
Balance at March 31, 2004	$	(10,023	)	$	(25,208	)	$	(35,231	)

F-9

9.

The Company has several pension and retirement plans covering substantially all of its employees in the United States. The Company also provides certain health care benefit to age 65 and life insurance benefits for certain eligible retired United States employees.

The components of net periodic pension cost consisted of the following:

		Quarters Ended March 31,
		2003			2004
		(Dollars in Thousands)
Service cost		$	392		$	443
Interest cost			1,269			1,310
Expected return on plan assets			(1,007	)		(1,256	)
Amortization of prior service cost			49			51
Amortization of actuarial loss			482			171
	Net cost	$	1,185		$	719

The components of other net periodic postretirement benefits cost (health care and life insurance) consisted of the following:

		Quarters Ended March 31,
		2003			2004
		(Dollars in Thousands)
Service cost		$	136		$	190
Interest cost			236			264
Amortization of prior service cost			(46	)		(55	)
Amortization of actuarial loss			58			91
	Net cost	$	384		$	490

During the first quarter of 2004, the Company contributed approximately $625,000 to its pension plans and $354,000 for the payment of benefits from its postretirement benefit plan. The Company presently anticipates contributing an additional $4,233,000 to its pension plans and $1,353,000 for the payment of benefits from its postretirement benefit plan during the remainder of 2004.

10.

The Company's payment obligations under its 9³/4% Senior Notes due 2007 (the "Senior Notes") are guaranteed by certain of the Company's wholly-owned subsidiaries (the "Guarantor Subsidiaries"). Such guarantees are full, unconditional and joint and several. Separate financial statements of the Guarantor Subsidiaries are not presented because the Company's management has determined that they would not be material to investors. The following supplemental financial information sets forth, on an unconsolidated basis, statement of operations, balance sheet and statement of cash flow information for the Company (the "Parent Company"), for the Guarantor Subsidiaries and for the Company's non-guarantor subsidiaries (the "Other Subsidiaries"). The supplemental financial information reflects the investments of the Company in the Guarantor and Other Subsidiaries using the equity method of accounting. The Company has determined that it is not practicable to allocate goodwill, intangible assets and deferred income taxes to the Guarantor Subsidiaries and Other Subsidiaries. Parent Company amounts for net earnings (loss) and common shareholders' investment differ from consolidated amounts as intercompany profit in subsidiary inventory has not been eliminated in the Parent Company statement but has been eliminated in the Consolidated Totals.

F-10

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
QUARTER ENDED MARCH 31, 2003
(Dollars in Thousands)

	Parent Company			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidated Total
Sales	$	34,975		$	7,550		$	33,429		$	(15,072	)	$	60,882
Cost of products sold		26,240			7,936			26,712			(14,564	)		46,324
Gross profit (loss)		8,735			(386	)		6,717			(508	)		14,558
Selling, general and administrative expenses		3,434			546			4,862			(51	)		8,791
Research and development expenses		1,154			—			—			—			1,154
Amortization of intangible assets		412			—			—			—			412
Operating earnings (loss)		3,735			(932	)		1,855			(457	)		4,201
Interest expense		4,751			333			1,286			(1,847	)		4,523
Other (income) expense—net		(1,301	)		—			(342	)		1,847			204
Earnings (loss) before income taxes and equity in net earnings of consolidated subsidiaries		285			(1,265	)		911			(457	)		(526	)
Income taxes		167			6			633			—			806
Earnings (loss) before equity in net loss of consolidated subsidiaries		118			(1,271	)		278			(457	)		(1,332	)
Equity in net loss of consolidated subsidiaries		(993	)		—			—			993			—
Net earnings (loss)	$	(875	)	$	(1,271	)	$	278		$	536		$	(1,332	)

F-11

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS
QUARTER ENDED MARCH 31, 2004
(Dollars in Thousands)

	Parent Company			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidated Total
Sales	$	61,142		$	12,540		$	46,114		$	(22,668	)	$	97,128
Cost of products sold		46,854			11,696			40,866			(21,945	)		77,471
Gross profit		14,288			844			5,248			(723	)		19,657
Selling, general and administrative expenses		9,163			612			4,354			(73	)		14,056
Research and development expenses		1,354			—			—			—			1,354
Amortization of intangible assets		412			—			—			—			412
Operating earnings		3,359			232			894			(650	)		3,835
Interest expense		4,338			339			540			(1,092	)		4,125
Other (income) expense—net		(397	)		—			(350	)		1,092			345
Earnings (loss) before income taxes and equity in net loss of consolidated subsidiaries		(582	)		(107	)		704			(650	)		(635	)
Income tax expense		341			3			1,036			—			1,380
Loss before equity in net loss of consolidated subsidiaries		(923	)		(110	)		(332	)		(650	)		(2,015	)
Equity in net loss of consolidated subsidiaries		(442	)		—			—			442			—
Net loss	$	(1,365	)	$	(110	)	$	(332	)	$	(208	)	$	(2,015	)

F-12

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATING CONDENSED BALANCE SHEET
DECEMBER 31, 2003
(Dollars in Thousands)

			Parent Company		Guarantor Subsidiaries			Other Subsidiaries		Eliminations			Consolidated Total
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	—	$	16		$	7,222	$	(1,163	)	$	6,075
	Receivables—net			24,325		8,687			39,335		764			73,111
	Intercompany receivables			84,418		632			31,833		(116,883	)		—
	Inventories			58,405		5,980			60,132		(8,619	)		115,898
	Prepaid expenses and other current assets			1,722		56			6,431		—			8,209
		Total Current Assets		168,870		15,371			144,953		(125,901	)		203,293
OTHER ASSETS:
	Restricted funds on deposit			245		—			333		—			578
	Goodwill			55,660		—			200		—			55,860
	Intangible assets—net			35,724		—			—		—			35,724
	Other assets			7,184		—			2,071		—			9,255
	Investment in subsidiaries			26,618		—			—		(26,618	)		—
				125,431		—			2,604		(26,618	)		101,417
PROPERTY, PLANT AND EQUIPMENT—net				39,701		6,028			11,704		—			57,433
			$	334,002	$	21,399		$	159,261	$	(152,519	)	$	362,143
LIABILITIES AND COMMON SHAREHOLDERS' INVESTMENT (DEFICIT)
CURRENT LIABILITIES:
	Accounts payable and accrued expenses		$	39,929	$	2,584		$	17,097	$	(19	)	$	59,591
	Intercompany payables			—		29,311			88,178		(117,489	)		—
	Liabilities to customers on uncompleted contracts and warranties			11,522		628			6,880		—			19,030
	Income taxes			478		45			3,791		—			4,314
	Borrowings under senior secured revolving credit facility and other short-term obligations			37,420		—			—		—			37,420
	Current maturities of long-term debt			—		49			327		—			376
	Total Current Liabilities			89,349		32,617			116,273		(117,508	)		120,731
LONG-TERM LIABILITIES:
	Liabilities to customers on uncompleted contracts and warranties			800		—			—		—			800
	Postretirement benefits			12,801		—			329		—			13,130
	Deferred expenses, pension and other			31,599		397			453		—			32,449
	Payable to American Industrial Partners			5,527		—			—		—			5,527
	Interest payable to Holdings			25,810		—			—		—			25,810
				76,537		397			782		—			77,716
LONG-TERM DEBT, less current maturities (including $75,635 of Senior Notes held by Holdings)				150,000		1,176			2,797		—			153,973
COMMON SHAREHOLDERS' INVESTMENT (DEFICIT)				18,116		(12,791	)		39,409		(35,011	)		9,723
			$	334,002	$	21,399		$	159,261	$	(152,519	)	$	362,143

F-13

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATING CONDENSED BALANCE SHEET
MARCH 31, 2004
(Dollars in Thousands)

		Parent Company		Guarantor Subsidiaries			Other Subsidiaries		Eliminations			Consolidated Total
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents	$	—	$	15		$	4,435	$	—		$	4,450
	Receivables—net		21,498		8,519			29,822		764		$	60,603
	Intercompany receivables		83,867		1,650			30,067		(115,584	)		—
	Inventories		59,878		6,699			58,232		(3,513	)		121,296
	Prepaid expenses and other current assets		2,046		161			6,391		—			8,598
	Total Current Assets		167,289		17,044			128,947		(118,333	)		194,947
OTHER ASSETS:
	Restricted funds on deposit		245		—			338		—			583
	Goodwill		55,660		—			200		—			55,860
	Intangible assets—net		35,312		—			—		—			35,312
	Other assets		5,729		—			2,159		—			7,888
	Investment in subsidiaries		25,394		—			—		(25,394	)		—
			122,340		—			2,697		(25,394	)		99,643
PROPERTY, PLANT AND EQUIPMENT—net			38,164		5,806			11,240		—			55,210
		$	327,793	$	22,850		$	142,884	$	(143,727	)	$	349,800
LIABILITIES AND COMMON SHAREHOLDERS' INVESTMENT (DEFICIT)
CURRENT LIABILITIES:
	Accounts payable and accrued expenses	$	41,777	$	2,959		$	14,939	$	(200	)	$	59,475
	Intercompany payables		653		30,251			76,069		(106,973	)		—
	Liabilities to customers on uncompleted contracts and warranties		3,370		628			5,133		—			9,131
	Income taxes		559		46			4,372		—			4,977
	Borrowings under senior secured revolving credit facility and other short-term obligations		35,055		—			263		—			35,318
	Current maturities of long-term debt		—		48			269		—			317
	Total Current Liabilities		81,414		33,932			101,045		(107,173	)		109,218
LONG-TERM LIABILITIES:
	Liabilities to customers on uncompleted contracts and warranties		800		—			—		—			800
	Postretirement benefits		12,952		—			322		—			13,274
	Deferred expenses, pension and other		31,281		654			492		—			32,427
	Payable to American Industrial Partners		5,665		—			—		—			5,665
	Interest payable to Holdings		23,660		—			—		—			23,660
			74,358		654			814		—			75,826
LONG-TERM DEBT, less current maturities			150,000		1,165			2,730		—			153,895
COMMON SHAREHOLDERS' INVESTMENT (DEFICIT)			22,021		(12,901	)		38,295		(36,554	)		10,861
		$	327,793	$	22,850		$	142,884	$	(143,727	)	$	349,800

F-14

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
QUARTER ENDED MARCH 31, 2003
(Dollars in Thousands)

	Parent Company			Guarantor Subsidiaries			Other Subsidiaries			Eliminations		Consolidated Total
Net Cash Provided By (Used In) Operating Activities	$	(1,602	)	$	191		$	1,333		$	—	$	(78	)
Cash Flows From Investing Activities
Decrease in restricted funds on deposit		23			—			49			—		72
Purchases of property, plant and equipment		(120	)		(1	)		(268	)		—		(389	)
Proceeds from sale of property, plant and equipment		3			2			10			—		15
Net cash provided by (used in) investing activities		(94	)		1			(209	)		—		(302	)
Cash Flows From Financing Activities
Proceeds from revolving credit facilities		2,735			—			—			—		2,735
Net decrease in other long-term debt and bank borrowings		(63	)		(11	)		(406	)		—		(480	)
Payment of refinancing expenses		(976	)		—			—			—		(976	)
Net cash provided by (used in) financing activities		1,696			(11	)		(406	)		—		1,279
Effect of exchange rate changes on cash		—			—			86			—		86
Net increase in cash and cash equivalents		—			181			804			—		985
Cash and cash equivalents at beginning of period		—			24			4,165			—		4,189
Cash and cash equivalents at end of period	$	—		$	205		$	4,969		$	—	$	5,174

F-15

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS
QUARTER ENDED MARCH 31, 2004
(Dollars in Thousands)

	Parent Company			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidated Total
Net Cash Provided By (Used In) Operating Activities	$	3,058		$	11		$	(2,777	)	$	1,163		$	1,455
Cash Flows From Investing Activities
Increase in restricted funds on deposit		—			—			(5	)		—			(5	)
Purchases of property, plant and equipment		(533	)		(3	)		(168	)		—			(704	)
Proceeds from sale of property, plant and equipment		6			2			—			—			8
Net cash provided by (used in) investing activities		(527	)		(1	)		(173	)		—			(701	)
Cash Flows From Financing Activities
Payments of revolving credit facilities		(2,365	)		—			—			—			(2,365	)
Net decrease in other long-term debt and bank borrowings		—			(11	)		138			—			127
Payment of refinancing expenses		(166	)		—			—			—			(166	)
Net cash provided by (used in) financing activities		(2,531	)		(11	)		138			—			(2,404	)
Effect of exchange rate changes on cash		—			—			25			—			25
Net increase (decrease) in cash and cash equivalents		—			(1	)		(2,787	)		1,163			(1,625	)
Cash and cash equivalents at beginning of period		—			16			7,222			(1,163	)		6,075
Cash and cash equivalents at end of period	$	—		$	15		$	4,435		$	—		$	4,450

F-16

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in Thousands, Except Per Share Amounts)

		Years Ended December 31,
		2001			2002			2003
Sales		$	290,576		$	289,598		$	337,695
Cost of products sold			243,791			233,516			268,162
	Gross profit		46,785			56,082			69,533
Selling, general and administrative expenses			30,806			32,214			42,747
Research and development expenses			5,900			6,512			4,594
Amortization of intangible assets			4,292			1,647			1,647
	Operating earnings		5,787			15,709			20,545
Interest expense			20,885			18,672			17,687
Other (income) expense—net			(8,045	)		2,776			856
Earnings (loss) before income taxes			(7,053	)		(5,739	)		2,002
Income tax expense			3,410			5,047			5,583
Net loss		$	(10,463	)	$	(10,786	)	$	(3,581	)
Basic and diluted loss per share data:
	Net loss per share	$	(.91	)	$	(.94	)	$	(.31	)
	Weighted average shares		11,484,800			11,484,800			11,710,312

See notes to consolidated financial statements.

F-17

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Dollars in Thousands)

		Years Ended December 31,
		2001			2002			2003
Net loss		$	(10,463	)	$	(10,786	)	$	(3,581	)
Other comprehensive income (loss):
	Foreign currency translation adjustments		(6,300	)		(569	)		15,586
	Minimum pension liability adjustment		(15,245	)		(13,948	)		3,985
Other comprehensive income (loss)			(21,545	)		(14,517	)		19,571
Comprehensive income (loss)		$	(32,008	)	$	(25,303	)	$	15,990

See notes to consolidated financial statements.

F-18

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands, Except Per Share Amounts)

			December 31,
			2002			2003
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	4,189		$	6,075
	Receivables—net			52,770			73,111
	Inventories			114,312			115,898
	Prepaid expenses and other current assets			6,186			8,209
		Total Current Assets		177,457			203,293
OTHER ASSETS:
	Restricted funds on deposit			1,485			578
	Goodwill			55,860			55,860
	Intangible assets—net			37,662			35,724
	Other assets			11,935			9,255
				106,942			101,417
PROPERTY, PLANT AND EQUIPMENT:
	Land			1,850			2,114
	Buildings and improvements			7,395			9,913
	Machinery and equipment			97,320			100,928
	Less accumulated depreciation			(44,086	)		(55,522	)
				62,479			57,433
			$	346,878		$	362,143

F-19

			December 31,
			2002			2003
LIABILITIES AND COMMON SHAREHOLDERS' INVESTMENT (DEFICIT)
CURRENT LIABILITIES:
	Accounts payable and accrued expenses		$	59,216		$	59,591
	Liabilities to customers on uncompleted contracts and warranties			7,850			19,030
	Income taxes			3,443			4,314
	Borrowings under senior secured revolving credit facility and other short-term obligations			495			37,420
	Current maturities of long-term debt			431			376
		Total Current Liabilities		71,435			120,731
LONG-TERM LIABILITIES:
	Liabilities to customers on uncompleted contracts and warranties			2,000			800
	Postretirement benefits			12,751			13,130
	Deferred expenses, pension and other			38,219			32,449
	Payable to American Industrial Partners			4,364			5,527
	Interest payable to Holdings			18,436			25,810
				75,770			77,716
LONG-TERM DEBT, less current maturities (includes $75,635 of Senior Notes held by Holdings)				207,804			153,973
COMMITMENTS AND CONTINGENCIES—Note O
COMMON SHAREHOLDERS' INVESTMENT (DEFICIT)
	Common stock—par value $.01 per share, authorized 13,600,000 shares, issued 11,557,200 and 12,130,800 shares, respectively			116			121
	Additional paid-in capital			147,613			149,472
	Treasury stock, at cost—72,400 shares			(851	)		(851	)
	Accumulated deficit			(101,202	)		(104,783	)
	Accumulated other comprehensive loss			(53,807	)		(34,236	)
				(8,131	)		9,723
			$	346,878		$	362,143

See notes to consolidated financial statements.

F-20

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' INVESTMENT (DEFICIT)

(Dollars in Thousands)

		Common Stock		Additional Paid-In Capital		Treasury Stock			Accumulated Deficit			Other Comprehensive Loss
Balance at January 1, 2001		$	14	$	144,451	$	(851	)	$	(79,953	)	$	(17,745	)
	Capital contributions from Bucyrus Holdings, LLC		—		3,264		—			—			—
	Net loss		—		—		—			(10,463	)		—
	Translation adjustments		—		—		—			—			(6,300	)
	Minimum pension liability adjustment		—		—		—			—			(15,245	)
Balance at December 31, 2001			14		147,715		(851	)		(90,416	)		(39,290	)
	Net loss		—		—		—			(10,786	)		—
	Translation adjustments		—		—		—			—			(569	)
	Minimum pension liability adjustment		—		—		—			—			(13,948	)
Balance at December 31, 2002			14		147,715		(851	)		(101,202	)		(53,807	)
	Issuance of common stock (573,600 shares)		1		71		—			—			—
	Stock compensation		—		1,792		—			—			—
	Net loss		—		—		—			(3,581	)		—
	Translation adjustments		—		—		—			—			15,586
	Minimum pension liability adjustment		—		—		—			—			3,985
Balance at December 31, 2003		$	15	$	149,578	$	(851	)	$	(104,783	)	$	(34,236	)

See notes to consolidated financial statements.

F-21

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

			Years Ended December 31,
			2001			2002			2003
Cash Flows From Operating Activities
Net loss			$	(10,463	)	$	(10,786	)	$	(3,581	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
	Depreciation			11,240			10,666			10,831
	Amortization			5,414			4,748			2,888
	Stock compensation expense			—			—			1,792
	Loss on sale of property, plant and equipment			750			655			626
	Gain on sale of The Principal Financial Group shares			(8,704	)		—			—
	Changes in assets and liabilities:
		Receivables		3,860			1,329			(13,247	)
		Inventories		(5,843	)		(10,953	)		8,558
		Other current assets		(12	)		(825	)		86
		Other assets		(1,431	)		1,004			1,701
		Current liabilities other than income taxes, short-term obligations and current maturities of long-term debt		157			9,618			6,846
		Income taxes		(546	)		2,186			299
		Long-term liabilities other than deferred income taxes		4,269			2,063			6,139
Net cash provided by (used in) operating activities				(1,309	)		9,705			22,938
Cash Flows From Investing Activities
(Increase) decrease in restricted funds on deposit				(32	)		(903	)		907
Proceeds from sale of The Principal Financial Group shares				5,730			2,974			—
Purchases of property, plant and equipment				(4,127	)		(5,457	)		(4,578	)
Proceeds from sale of property, plant and equipment				536			745			368
Net proceeds from sale and leaseback transaction				—			6,657			—
Purchase of Bennett & Emmott (1986) Ltd.				—			(200	)		—
Net cash provided by (used in) investing activities				2,107			3,816			(3,303	)

F-22

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(Dollars in Thousands)

		Years Ended December 31,
		2001			2002			2003
Cash Flows From Financing Activities
Net repayments of revolving credit facilities			(1,052	)		(14,809	)		(16,603	)
Net increase (decrease) in other bank borrowings			271			(71	)		(494	)
Proceeds from issuance of long-term debt			1,237			925			—
Payment of long-term debt			(1,641	)		(801	)		(439	)
Payment of refinancing expenses			—			(2,047	)		(1,526	)
Proceeds from issuance of common stock			—			—			72
Capital contribution from Bucyrus Holdings, LLC			1,093			—			—
Net cash used in financing activities			(92	)		(16,803	)		(18,990	)
Effect of exchange rate changes on cash			(436	)		253			1,241
Net increase (decrease) in cash and cash equivalents			270			(3,029	)		1,886
Cash and cash equivalents at beginning of year			6,948			7,218			4,189
Cash and cash equivalents at end of year		$	7,218		$	4,189		$	6,075
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
	Interest	$	14,297		$	11,258		$	10,350
	Income taxes—net of refunds		1,522			2,749			6,524

Supplemental Schedule of Non-Cash Investing and Financing Activities

        On March 20, 2001, the Company recorded an equity contribution from Bucyrus Holdings, LLC ("Holdings"), the Company's parent, and a corresponding reduction in interest payable to Holdings, in the amount of $2,171,000, which represented accrued interest as of June 30, 2000 on the 9³/4% Senior Notes due 2007 acquired by Holdings.

See notes to consolidated financial statements.

F-23

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A—SUMMARY OF ACCOUNTING POLICIES

Nature of Operations

        Bucyrus International, Inc. (the "Company"), a majority-owned subsidiary of Bucyrus Holdings, LLC ("Holdings"), is a Delaware corporation and a leading manufacturer of surface mining equipment, principally draglines, electric mining shovels and large rotary blasthole drills. Major markets for the surface mining industry are copper, coal, oil sands and iron ore. The Company also has a comprehensive aftermarket business that includes replacement parts, maintenance and other services. The largest markets for the Company's products and services are in Australia, Canada, China, India, South Africa, South America and the United States.

        The Company currently purchases alternating current drives and other electrical parts, an important component of its equipment, from Siemens Energy & Automation, Inc. ("Siemens"). The loss of Siemens, the Company's only sole source supplier, could cause a delay in manufacturing and a possible loss of sales, which could have a material adverse effect on the Company's business.

Basis of Presentation and Use of Estimates

        The consolidated financial statements as of December 31, 2002 and 2003 and for the years ended December 31, 2001, 2002 and 2003 were prepared under a basis of accounting that reflects the fair value of the assets acquired and liabilities assumed, and the related expenses and all debt incurred, in connection with the acquisition of the Company by Holdings in 1997.

        The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from those estimates.

Principles of Consolidation

        The consolidated financial statements include the accounts of all subsidiaries. All significant intercompany transactions, profits and accounts have been eliminated.

Cash Equivalents

        All highly liquid investments with maturities of three months or less when purchased are considered to be cash equivalents. The carrying value of these investments approximates fair value.

Restricted Funds on Deposit

        Restricted funds on deposit represent cash and temporary investments used to support the issuance of standby letters of credit and other obligations. The carrying value of these funds approximates fair value.

Inventories

        Inventories are stated at lower of cost (first-in, first-out method) or net realizable value. The cost of finished goods and work in progress includes the cost of raw materials, other direct costs and production overheads. Net realizable value is the estimate of the selling price in the ordinary course of business, less the cost of completion and selling. Provision is made to reduce the cost to net realizable value for obsolete and slow-moving inventories. Advances from customers are netted against inventories to the extent of related accumulated costs. Advances in excess of related costs

F-24

and earnings on uncompleted contracts are classified as a liability to customers. Advances netted against inventory costs were zero at December 31, 2003 and 2002.

Goodwill and Intangible Assets

        Goodwill and intangible assets are being accounted for in accordance with Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142") (see Note D).

        Intangible assets consist of engineering drawings, bill-of-material listings, software, trademarks and trade names. At December 31, 2002 and 2003, intangible assets also included $3,259,000 and $2,967,000, respectively, related to an adjustment to record an additional minimum pension liability (see Note J).

        Historically, the cost of goodwill and other intangible assets have been amortized to expense on a straight line basis over the estimated periods benefited, which ranged from 10 to 30 years.

Property, Plant and Equipment

        Depreciation is provided over the estimated useful lives of respective assets using the straight-line method for financial reporting and accelerated methods for income tax purposes. Estimated useful lives used for financial reporting purposes range from ten to forty years for buildings and improvements and three to seventeen years for machinery and equipment.

Impairment of Long-Lived Assets

        The Company continually evaluates whether events and circumstances have occurred that indicate the remaining estimated useful lives of property, plant and equipment and intangible assets with finite lives may warrant revision or that the remaining balance of each may not be recoverable. The Company accounts for any impairment of long-lived assets in accordance with Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets."

Foreign Currency Translation

        The assets and liabilities of foreign subsidiaries are translated into U.S. dollars using year-end exchange rates. Sales and expenses are translated at average rates during the year. Adjustments resulting from this translation are deferred and reflected as a separate component of Common Shareholders' Investment. Gains and losses from foreign currency transactions are included in selling, general and administrative expenses in the Consolidated Statements of Operations. Transaction losses totaled $780,000, $1,022,000 and $783,000 for the years ended December 31, 2001, 2002 and 2003, respectively. Transaction gains and losses on intercompany advances to foreign subsidiaries for which settlement is not planned or anticipated in the foreseeable future are deferred and reflected as a component of Common Shareholders' Investment (Deficit).

Comprehensive Income (Loss)

        Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income," requires the reporting of comprehensive income (loss) in addition to net income (loss) from operations. Comprehensive income (loss) is a more inclusive financial reporting method that includes disclosure of financial information that historically has not been recognized in the

F-25

calculation of net income (loss). The Company reports comprehensive income (loss) and accumulated other comprehensive loss, which encompasses net loss, foreign currency translation adjustments and minimum pension liability adjustments, in the Consolidated Statements of Common Shareholders' Investment (Deficit). Information on accumulated other comprehensive loss is as follows:

	Cumulative Translation Adjustments			Minimum Pension Liability Adjustments			Accumulated Other Comprehensive Loss
	(Dollars in Thousands)
Balance at January 1, 2001	$	(17,745	)	$	—		$	(17,745	)
Changes—Year ended December 31, 2001		(6,300	)		(15,245	)		(21,545	)
Balance at December 31, 2001		(24,045	)		(15,245	)		(39,290	)
Changes—Year ended December 31, 2002		(569	)		(13,948	)		(14,517	)
Balance at December 31, 2002		(24,614	)		(29,193	)		(53,807	)
Changes—Year ended December 31, 2003		15,586			3,985			19,571
Balance at December 31, 2003	$	(9,028	)	$	(25,208	)	$	(34,236	)

Revenue Recognition

        Revenue from long-term sales contracts, such as for the manufacture of Company machines, is recognized using the percentage-of-completion method prescribed by SOP No. 81-1 due to the length of time to fully manufacture and assemble the Company's machines. The Company measures revenue recognized based on the ratio of estimated costs incurred to date in relation to total costs to be incurred. The percentage-of-completion method of accounting for these contracts most accurately reflects the status of these uncompleted contracts in the Company's financial statements and most accurately measures the matching of revenues with expenses. The Company also has long-term maintenance and repair contracts with customers. Under these contracts, the Company provides all replacement parts, regular maintenance services and necessary repairs for the excavation equipment at a particular mine with an on-site support team. In addition, some of these contracts call for Company personnel to operate the equipment being serviced. The customer is billed monthly and a liability for deferred revenues is recorded if payments received exceed revenues recognized. At the time a loss on a contract becomes known, the amount of the estimated loss is recognized in the consolidated financial statements. Revenue from all other types of sales, primarily sales of aftermarket parts, net of estimated returns and allowances, is recognized in conformity with Staff Accounting Bulletin No. 104, when all of the following circumstances are satisfied: persuasive evidence of an arrangement exists, the price is fixed or determinable, collectibility is reasonably assured, and delivery has occurred or services have been rendered. Criteria for revenue recognition is generally met at the time products are shipped, as the terms are FOB shipping point.

        Included in the current portion of liabilities to customers on uncompleted contracts and warranties are advances in excess of related costs and earnings on uncompleted contracts of $4,201,000 and $14,226,000 at December 31, 2002 and 2003, respectively.

F-26

Warranty

        Sales of the Company's products generally carry typical manufacturers' warranties, the majority of which cover products for one year, based on terms that are generally accepted in the marketplace. The Company records provisions for estimated warranty and other related costs at the time of sale based on historical warranty loss experience and periodically adjusts these provisions to reflect actual experience.

Shipping and Handling Fees and Costs

        Revenue received from shipping and handling fees is reflected in sales. Shipping fee revenue was insignificant for all periods presented. Shipping and handling costs are included in cost of products sold.

Financial Instruments

        Based on Company estimates, the carrying amounts of cash equivalents, receivables, accounts payable, accrued liabilities and variable rate debt approximated fair value at December 31, 2002 and 2003. The Company's Senior Notes (see Note G) with a carrying value of $150,000,000 were bid at 40% at December 31, 2002. There were no bids for the Senior Notes at December 31, 2003. Accordingly, the fair value of the Senior Notes was based on the market value of debt with similar maturities. Based on all available information, management believes the fair value of the Senior Notes was $60,000,000 and $150,000,000 at December 31, 2002, and 2003, respectively.

Derivative Financial Instruments

        The Company has entered into foreign exchange forward contracts in order to manage and preserve the economic value of cash flows in non-functional currencies. At December 31, 2003, the Company has financial contracts outstanding to purchase 5,658,000 Australian dollars at a total price of $3,865,000 and to purchase 700,000 euro at a total price of $815,000. Based upon year-end exchange rates, the outstanding contracts are recorded at fair value. The Company conducts its business on a multinational basis in a wide variety of foreign currencies and hedges foreign currency exposures arising from various receivables, liabilities and expected inventory purchases. Derivative instruments that are utilized to hedge the foreign currency risk associated with anticipated inventory purchases in foreign currencies are designated as cash-flow hedges. Gains and losses on these instruments, to the extent that they have been effective, are deferred in other comprehensive income and recognized in earnings when the related inventory is sold. Ineffectiveness related to these hedge relationships is recognized currently in the Statements of Operations and was not significant. The maturity of these instruments does not exceed twelve months.

        The effective portion of changes in the fair value of the derivatives is recorded in other comprehensive income and is recognized in the Statements of Operations when the hedge item effects earnings.

        The Company also uses natural hedges to mitigate risks associated with foreign currency exposures. For example, oftentimes the Company has non-functional currency denominated receivables from customers for which the exposure is partially mitigated by a corresponding non-functional currency payable to a vendor.

F-27

Accounting for Stock Options

        The Company accounts for stock options in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," ("APB 25") as allowed by Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123").

        The following table illustrates the effect on net loss and net loss per share as if the fair value-based method provided by SFAS 123 had been applied for all outstanding and unvested awards in each period:

		Years Ended December 31,
		2001			2002			2003
		(Dollars In Thousands, Except Per Share Amounts)
Reported net loss		$	(10,463	)	$	(10,786	)	$	(3,581	)
Add: Stock-based employee compensation expense recorded for stock options, net of related tax effects			—			—			1,792
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects			(258	)		(283	)		(118	)
Pro forma net loss		$	(10,721	)	$	(11,069	)	$	(1,907	)
Net loss per share of common stock (basic and diluted):
	As reported	$	(.91	)	$	(.94	)	$	(.31	)
	Pro forma		(.93	)		(.96	)		(.16	)

New Accounting Pronouncement

        The Financial Accounting Standards Board ("FASB") staff has issued a FASB Staff Position which defers any accounting for the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 and requires additional disclosures pending further consideration of the underlying accounting issues. The Company provides certain health care benefits only until age 65. Therefore, accounting for the Medicare Prescription Drug, Improvement and Modernization Act of 2003 is not expected to have a material effect on the Company's consolidated financial position, results of operations and cash flows.

Reclassifications

        Certain line item reclassifications have been made to the 2001 and 2002 Consolidated Statements of Operations to conform to the 2003 presentation.

Subsequent Event

        On June 9, 2004, the Company effected an 8-for-1 stock split of its common stock. All references in the accompanying consolidated financial statements and notes thereto to earnings per share and the number of shares have been retroactively restated to reflect this stock split.

F-28

NOTE B—RECEIVABLES

        Receivables at December 31, 2002 and 2003 include $2,896,000 and $8,033,000, respectively, of revenues from long-term contracts which were not billable at that date. Billings on long-term contracts are made in accordance with the terms as defined in the individual contracts. The unbilled receivables are for contracts that were near completion as of the balance sheet dates and collection of amounts due was scheduled to be within the next twelve months.

        Current receivables are reduced by an allowance for losses of $1,158,000 and $1,472,000 at December 31, 2002 and 2003, respectively.

NOTE C—INVENTORIES

        Inventories consist of the following:

	December 31,
	2002		2003
	(Dollars in Thousands)
Raw materials and parts	$	15,509	$	11,655
Work in process		17,817		20,433
Finished products (primarily replacement parts)		80,986		83,810
	$	114,312	$	115,898

NOTE D—GOODWILL AND INTANGIBLE ASSETS

        The Company adopted SFAS 142 on January 1, 2002. SFAS 142 establishes accounting and reporting standards associated with goodwill and other intangible assets. Goodwill is no longer subject to amortization, but instead is subject to an evaluation for impairment at least annually by applying a two-step fair-value-based test. Additionally, intangible assets with indefinite lives are also no longer amortized but are subject to an evaluation for impairment at least annually by applying a lower-of-cost-or-market test. Intangible assets with finite lives continue to be amortized over a period of 10 to 20 years. For goodwill, the fair value of the Company's reporting units exceeds the carrying amounts and an impairment charge is not required. The Company also completed an impairment analysis of its indefinite life intangible assets in accordance with the provisions of SFAS 142 and determined that an impairment charge is not required. The following table summarizes the effects of SFAS 142 on the Company's net loss and loss per share for the periods presented:

		Years Ended December 31,
		2001			2002			2003
		(Dollars In Thousands, Except Per Share Amounts)
Reported net loss		$	(10,463	)	$	(10,786	)	$	(3,581	)
Goodwill amortization, net of tax			2,162			—			—
Trademarks/Trade names amortization, net of tax			483			—			—
Adjusted net loss		$	(7,818	)	$	(10,786	)	$	(3,581	)
Basic and diluted loss per share:
	Reported net loss	$	(.91	)	$	(.94	)	$	(.31	)
	Goodwill amortization		.19			—			—
	Trademarks/Trade names amortization		.04			—			—
	Adjusted net loss per share	$	(.68	)	$	(.94	)	$	(.31	)

F-29

        Intangible assets consist of the following:

		December 31, 2002						December 31, 2003
		Weighted Average Life	Gross Carrying Amount		Accumulated Amortization			Weighted Average Life	Gross Carrying Amount		Accumulated Amortization
		(years)	(Dollars in Thousands)					(years)	(Dollars in Thousands)
Amortized intangible assets:
	Engineering drawings	20	$	25,500	$	(6,719	)	20	$	25,500	$	(7,994	)
	Bill of material listings	20		2,856		(752	)	20		2,856		(895	)
	Software	10		2,288		(1,206	)	10		2,288		(1,434	)
			$	30,644	$	(8,677	)		$	30,644	$	(10,323	)
Unamortized intangible assets:
	Trademarks/Trade names		$	12,436					$	12,436
	Intangible pension asset			3,259						2,967
			$	15,695					$	15,403

        The aggregate intangible amortization expense for the years ended December 31, 2001, 2002 and 2003 was $4,292,000, $1,647,000 and $1,647,000, respectively. The estimated future amortization expense of intangible assets is as follows:

	(Dollars in Thousands)
2004	$	1,647
2005		1,647
2006		1,647
2007		1,585
2008		1,418
Future		12,377
	$	20,321

NOTE E—SALE AND LEASEBACK

        On January 4, 2002, the Company completed a sale and leaseback transaction for a portion of its land and buildings in South Milwaukee, Wisconsin. The Company is leasing back the property under an operating lease over a period of twenty years with options for renewals. Net proceeds received from this transaction were $7,157,000 less $500,000 required as a security deposit. No gain was recognized on this transaction.

F-30

NOTE F—ACCOUNTS PAYABLE AND ACCRUED EXPENSES

        Accounts payable and accrued expenses consist of the following:

	December 31,
	2002		2003
	(Dollars in Thousands)
Trade accounts payable	$	30,607	$	31,059
Wages and salaries		5,917		7,589
Pension		3,706		2,819
Other		18,986		18,124
	$	59,216	$	59,591

NOTE G—LONG-TERM DEBT AND FINANCING ARRANGEMENTS

        Long-term debt consists of the following:

	December 31,
	2002			2003
	(Dollars in Thousands)
93/4% Senior Notes due 2007	$	150,000		$	150,000
Senior secured revolving credit facility		54,023			—
Mortgage loan at Bucyrus Canada Limited		2,178			2,536
Other		2,034			1,813
		208,235			154,349
Less current maturities of long-term debt		(431	)		(376	)
	$	207,804		$	153,973

        The Company has outstanding $150,000,000 of 9³/4% Senior Notes due 2007 (the "Senior Notes") which were issued pursuant to an indenture among the Company, certain of its wholly-owned domestic subsidiaries (the "Guarantor Subsidiaries"), and BNY Midwest Trust Company, as Trustee (the "Senior Notes Indenture"). The Senior Notes mature on September 15, 2007 and interest thereon is payable each March 15 and September 15. During 2000, Holdings acquired $75,635,000 of the Company's $150,000,000 issue of Senior Notes. Holdings had agreed as a part of the Loan and Security Agreement (see below) and a previous credit agreement to defer the receipt of interest on these Senior Notes during the life of the agreements. However, in connection with an amendment of the Loan and Security Agreement on November 13, 2003, Holdings is permitted to receive the interest payable on the Senior Notes held by them on March 15, 2004 and September 15, 2004. The Company must use the proceeds of the $7,400,000 term loan portion of the Loan and Security Agreement to make the March 15, 2004 and September 15, 2004 interest payments with respect to the Senior Notes held by Holdings. The amendment of the Loan and Security Agreement also allows Holdings to sell or transfer any of the Senior Notes held by it, subject to certain restrictions. At December 31, 2002 and 2003, $18,436,000 and $25,810,000, respectively, of interest was accrued and payable to Holdings.

        An amendment to a previous credit agreement dated March 20, 2001 required Holdings to contribute to equity of the Company a portion of the accrued interest. As a result, on March 20,

F-31

2001, the Company recorded an equity contribution from Holdings and a corresponding reduction in interest payable to Holdings in the amount of $2,171,000, which represented accrued interest as of June 30, 2000 on the Senior Notes acquired by Holdings.

        The Senior Notes Indenture contains certain covenants that, among other things, limit the ability of the Company and the Guarantor Subsidiaries to: (i) incur additional indebtedness; (ii) pay any dividends or make any other distributions with respect to capital stock; (iii) make certain investments; (iv) use the proceeds of the sale of certain assets; (v) enter into certain transactions with affiliates; (vi) create liens; (vii) enter into certain sale and leaseback transactions; (viii) enter into certain mergers and consolidations or a sale of substantially all of its assets; and (ix) prepay the Senior Notes. Such covenants are subject to important qualifications and limitations. At December 31, 2003, the Company was in compliance with these covenants.

        The Company has a Loan and Security Agreement with GMAC Commercial Finance, LLC (the "Loan and Security Agreement") which provides the Company with an $74,500,000 senior secured revolving credit facility. The Loan and Security Agreement was amended on November 13, 2003 to provide an additional $7,400,000 senior secured term loan to enable the Company to pay certain interest during 2004 on its Senior Notes as discussed previously. The Loan and Security Agreement, as amended, expires on January 8, 2005. Outstanding borrowings under the senior secured revolving credit facility portion of the Loan and Security Agreement bear interest equal to either the prime rate plus an applicable margin (2% to 2.25%) or LIBOR plus an applicable margin (3.5% to 3.75%) and are subject to a borrowing base formula based on receivables and inventory. Borrowings under the term loan portion bear interest equal to either the prime rate plus 1.5% or LIBOR plus 2.5%. Borrowings outstanding at December 31, 2002 and 2003 were $54,023,000, and $37,420,000 respectively, at a weighted average interest rate of 6.3% and 4.9%, respectively. The borrowings at December 31, 2002 were classified as long-term debt and the borrowings at December 31, 2003 were classified as a current liability due to anticipated cash flows in 2004. The average borrowings under the Loan and Security Agreement (and a previous credit agreement) during 2002 was $61,628,000 at a weighted average interest rate of 5.9%, and the maximum borrowing outstanding was $69,333,000. The average borrowings under the Loan and Security Agreement during 2003 was $49,920,000 at a weighted average interest rate of 5.2%, and the maximum borrowing outstanding was $60,258,000. Substantially all of the domestic assets of the Company (excluding real property) and the receivables and inventory of the Company's Canadian subsidiary are pledged as collateral under the Loan and Security Agreement. In addition, all outstanding capital stock of the Company and its domestic subsidiaries as well as 65% of the capital stock of the Company's foreign subsidiaries are pledged as collateral. The Loan and Security Agreement contains covenants which, among other things, require the Company to maintain certain financial ratios and minimum levels of EBITDA, as defined. At December 31, 2003, the Company was in compliance with these covenants. At December 31, 2003, the amount available for borrowings under the revolving portion of the Loan and Security Agreement, net of mandatory reserves, was $18,164,000.

        At December 31, 2002 and 2003, there were $2,199,000 and $7,744,000, respectively, of standby letters of credit outstanding under all Company bank facilities.

        On April 30, 2002, Bucyrus Canada Limited, a wholly-owned subsidiary of the Company, entered into a C$3,510,000 mortgage loan. The term of the mortgage loan is 15 years at an initial

F-32

rate of 7.55% which is fixed for the first five years. The balance outstanding at December 31, 2002 and 2003 was C$3,425,000 and C$3,287,000, respectively. The mortgage loan is collateralized by the land, buildings and certain building attachments owned by Bucyrus Canada Limited. The net book value of this collateral at December 31, 2003 was C$4,129,000. The mortgage loan contains a number of financial covenants which, among other items, require Bucyrus Canada Limited to maintain certain financial ratios on an annual basis. At December 31, 2003, Bucyrus Canada Limited was in compliance with all applicable covenants.

        Maturities of long-term debt are as follows for each of the next five years:

	(Dollars in Thousands)
2004	$	376
2005		389
2006		350
2007		150,205
2008		220

NOTE H—COMMON SHAREHOLDERS' INVESTMENT

        In 2001, Holdings made capital contributions to the Company in the amount of $1,093,000 of cash and $2,171,000 of accrued interest on Senior Notes owned by Holdings (see Note G).

        In 1998, the Company's Board of Directors adopted the Bucyrus International, Inc. 1998 Management Stock Option Plan (the "1998 Option Plan") which authorizes the granting of stock options to key employees for up to a total of 1,600,000 shares of common stock of the Company at exercise prices to be determined in accordance with the provisions of the 1998 Option Plan. Options granted in 1998 were targeted to vest on the last day of the plan year at the rate of 25% of the aggregate number of shares of common stock underlying each series of options per year, provided that the Company attained a specified EBITDA goal in that plan year. The specified EBITDA goals were not attained and, as a result, none of these options have vested and none will vest until the date described below. Options granted under the 1998 Option Plan on August 1, 2001 are targeted to vest at the rate of 25% of the total option shares covered by the grant per year for the four (4) years subsequent to the date of the grant. Notwithstanding the foregoing, all options granted under the 1998 Option Plan shall vest automatically on the ninth anniversary of the date of the grant, regardless of performance criteria or, in the event of a Company Sale (as defined in the 1998 Option Plan), immediately prior to such sale provided such sale occurs prior to the fourth anniversary of the grant of options. Options granted pursuant to the 1998 Option Plan may be forfeited or repurchased by the Company at fair value, as defined, in the event of the participating employee's termination, and if not previously forfeited or exercised, expire and terminate no later than ten years after the date of grant or, in the event of a Company Sale, upon the consummation of such sale.

F-33

        The following table sets forth the activity and outstanding balances of options issued pursuant to the 1998 Option Plan:

	Options Outstanding
	Number of Options		Weighted Average Exercise Price		Available For Future Grants
Balances at January 1, 2001	466,800		$	12.50	1,133,200
Options forfeited	(14,000	)		12.50	14,000
Granted on August 1, 2001	1,147,200			.125	(1,147,200	)
Balances at December 31, 2001	1,600,000			3.63	0
Options forfeited	(4,000	)		12.50	4,000
Balances at December 31, 2002	1,596,000			3.61	4,000
Options exercised	(573,600	)		.125	—
Options forfeited	(4,400	)		12.50	4,400
Balances at December 31, 2003	1,018,000		$	5.53	8,400

        At December 31, 2001, none of the options outstanding were vested or exercisable. The outstanding options had a weighted average exercise price of $3.63 per share and a weighted average remaining contractual life of 8.6 years. At December 31, 2002, 286,792 of the options outstanding were vested and exercisable. The outstanding options had a weighted average exercise price of $3.61 per share and a weighted average remaining contractual life of 7.6 years. At December 31, 2003, none of the options outstanding were vested or exercisable. The outstanding options had a weighted average exercise price of $5.53 per share and a weighted average remaining contractual life of 6.1 years.

        Stock options outstanding at December 31, 2003 were as follows:

			Options Outstanding
Price		Weighted Average Contractual Life	Number of Options	Weighted Average Exercise Price
$	12.50	4.2 years	444,400	$	12.50
	.125	7.6 years	573,600		.125
			1,018,000	$	5.53

        The weighted average grant date fair value of stock options granted in 2001 under the 1998 Option Plan was $.10 per option. No options were granted in 2002 or 2003. The fair value of grants was estimated on the date of grant using the minimum value method with the following weighted average assumptions:

	1998 Option Plan
	2001
Risk-free interest rate	4.7%
Expected dividend yield	0%
Expected life	5 years
Calculated volatility	N/A

F-34

Stockholder's Agreement

        The Company is party to the Stockholders Agreement, as amended, dated as of March 17, 1998 (the "Stockholders Agreement"), with AIP ("American Industrial Partners") and certain other stockholders (together with AIP, the "Stockholders"). The Stockholders Agreement provides, among other things, that the Stockholders agree to vote and/or otherwise provide that six individuals designated by AIP shall sit on the Company's Board. Upon termination of employment of a management Stockholder, the Company has the option to repurchase all of the shares of stock held by such persons. A management Stockholder whose employment is terminated by reason of death, disability, resignation or termination other than for cause, has the right to require the Company to purchase all, but not less than all, of such Stockholder's shares. The Agreement also provides for certain restrictions on transfer of shares by Stockholders, including, among other things, that the Company has a right of first refusal to purchase all but not less than all, of any shares to be sold pursuant to a permitted transfer by any management Stockholder.

        If AIP or any of its affiliates (not including the Company) enter into a definitive agreement to sell its shares, management Stockholders shall be entitled to sell a pro rata portion of their shares at the same price and on the same terms and conditions as such proposed sale. If AIP proposes to sell, or otherwise dispose of any shares to a non-affiliate of AIP, AIP is entitled to require management Stockholders to sell up to all of their shares their shares at the same price and on the same terms and conditions as such proposed sale. The holders of a majority of shares held by AIP and its affiliates have unlimited demand registration rights on Forms S-2 or S-3 and up to two demand registrations on Form S-1 and Stockholders are entitled to "piggyback" registration rights on any registration statement filed on forms other than Form S-4 and Form S-8, in all cases subject to customary conditions.

        Provisions with respect to voting arrangements, bring along requirements and registration rights, as described above, shall terminate at such time as AIP owns less than 20% of all outstanding shares of the Company.

NOTE I—INCOME TAXES

        Deferred taxes are provided to reflect temporary differences between the financial and tax basis of assets and liabilities using presently enacted tax rates and laws. A valuation allowance is recognized if it is more likely than not that some or all of the deferred tax assets will not be realized.

        Earnings (loss) before income taxes consists of the following:

	Years Ended December 31,
	2001			2002			2003
	(Dollars In Thousands)
United States	$	(12,719	)	$	(18,039	)	$	(10,158	)
Foreign		5,666			12,300			12,160
Total	$	(7,053	)	$	(5,739	)	$	2,002

F-35

        The provision for income tax expense consists of the following:

		Years Ended December 31,
		2001		2002			2003
		(Dollars In Thousands)
Foreign income taxes:
	Current	$	2,581	$	4,505		$	6,215
	Deferred		737		857			(1,051	)
	Total		3,318		5,362			5,164
Federal income taxes:
	Current		—		(421	)		338
	Deferred		—		—			—
	Total		—		(421	)		338
Other (state and local taxes):
	Current		92		106			81
	Deferred		—		—			—
	Total		92		106			81
Total income tax expense		$	3,410	$	5,047		$	5,583

        Total income tax expense differs from amounts expected by applying the federal statutory income tax rate to earnings (loss) before income taxes as set forth in the following table:

	Years Ended December 31,
	2001			2002			2003
	(Dollars In Thousands)
Tax expense (benefit) at federal statutory rate	$	(2,469	)	$	(2,008	)	$	700
Valuation allowance adjustments		2,750			3,099			(593	)
Impact of foreign subsidiary income, tax rates and tax credits		2,902			4,833			6,035
State income taxes		60			69			53
Nondeductible goodwill amortization		757			—			—
Extraterritorial income exclusion		(560	)		(665	)		(1,227	)
Alternative minimum tax		—			(421	)		338
Other items		(30	)		140			277
Total income tax expense	$	3,410		$	5,047		$	5,583

F-36

        Significant components of deferred tax assets and deferred tax liabilities are as follows:

		December 31,
		2002			2003
		(Dollars in Thousands)
Deferred tax assets:
	Postretirement benefits	$	5,592		$	5,760
	Minimum pension liability adjustment		11,677			10,083
	Inventory valuation provisions		5,971			7,280
	Accrued and other liabilities		4,866			5,732
	Research and development expenditures		3,752			2,941
	Tax loss carryforward		22,031			17,448
	Tax credit carryforward		479			817
	Other items		1,293			1,261
	Total deferred tax assets		55,661			51,322
Deferred tax liabilities:
	Excess of book basis over tax basis of property, plant and equipment and intangible assets		(30,356	)		(27,578	)
Valuation allowance			(24,539	)		(21,927	)
Net deferred tax asset		$	766		$	1,817

        The classification of the net deferred tax assets and liabilities is as follows:

	December 31,
	2002			2003
	(Dollars in Thousands)
Current deferred tax asset	$	565		$	940
Long-term deferred tax asset		1,080			1,636
Current deferred tax liability		(478	)		(307	)
Long-term deferred tax liability		(401	)		(452	)
Net deferred tax asset	$	766		$	1,817

        Due to the recent history of domestic net operating losses, a valuation allowance has been used to reduce the net deferred tax assets (after giving effect to deferred tax liabilities) for domestic operations to an amount that is more likely than not to be realized. A roll-forward of the valuation allowance is presented below.

	Balance At Beginning Of Period		Additions—Allowance Established		Deductions— Allowance Used		Balance At End Of Period
Year ended December 31, 2001	$	13,848	$	5,849	$	—	$	19,697
Year ended December 31, 2002	$	19,697	$	4,842	$	—	$	24,539
Year ended December 31, 2003	$	24,539	$	—	$	2,612	$	21,927

F-37

        The Company, along with its domestic subsidiaries, and Holdings file a consolidated federal income tax return. The consolidated tax expense of the affiliated group is allocated using the pro-rata method based on each company's contribution to consolidated federal taxable income.

        As of December 31, 2003, the Company has available approximately $41,400,000 of federal net operating loss carry forwards ("NOL") NOL from the years 1990 through 1994, 1997 through 1999 and 2001, that expire in the years 2005 through 2021, to offset against future federal taxable income. Because both the 1997 acquisition of the Company by Holdings and the 1994 consummation of the Second Amended Joint Plan of Reorganization of B-E Holdings, Inc. and the Company as modified on December 1, 1994 (the "Amended Plan") resulted in an "ownership change" within the meaning of Section 382 of the Internal Revenue Code, the use of the majority of such NOL is subject to certain annual limitations. The total NOL available to offset federal taxable income in 2004 is approximately $23,600,000.

        As of December 31, 2003, the Company also has a federal alternative minimum tax credit carryforward of $817,000 which carries forward indefinitely. However, because $479,000 of this credit carryforward arose prior to the effective date of the Amended Plan, that portion will not be usable until the year 2010.

        The Company also has a significant amount of state NOL (which expire in the years 2004 through 2017) available to offset future state taxable income in states where it has significant operations. Since the majority of states in which the Company files its state returns follow rules similar to federal rules, it is expected that the usage of state NOL will be limited to approximately $71,000,000.

        Cumulative undistributed earnings of foreign subsidiaries that are considered to be permanently reinvested, and on which U.S. income taxes have not been provided by the Company, amounted to approximately $25,054,000 at December 31, 2003. It is not practicable to estimate the amount of additional tax which would be payable upon repatriation of such earnings; however, due to foreign tax credit limitations, higher effective U.S. income tax rates and foreign withholding taxes, additional taxes could be incurred.

F-38

NOTE J—PENSION AND RETIREMENT PLANS

        The Company has several pension and retirement plans covering substantially all of its employees in the United States. All plans have a measurement date of December 31.

        The following tables set forth the plans' funded status and amounts recognized in the consolidated financial statements at December 31, 2003 and 2002:

		December 31,
		2002			2003
		(Dollars in Thousands)
Change in projected benefit obligation:
	Projected benefit obligation at January 1	$	77,962		$	82,007
	Service cost		1,609			1,642
	Interest cost		5,401			5,322
	Actuarial loss		3,023			3,698
	Benefits paid		(5,988	)		(5,848	)
	Projected benefit obligation at December 31		82,007			86,821
Change in plan assets:
	Fair value of plan assets at January 1		59,851			48,216
	Actual return (loss) on plan assets		(6,339	)		10,047
	Employer contributions		692			3,994
	Benefits paid		(5,988	)		(5,848	)
	Fair value of plan assets at December 31		48,216			56,409
Net amount recognized:
	Funded status		(33,791	)		(30,412	)
	Unrecognized prior service cost		2,366			2,160
	Unrecognized net actuarial loss		31,207			27,061
	Net amount recognized	$	(218	)	$	(1,191	)
Amounts recognized in consolidated balance sheets at December 31:
	Long-term prepaid pension costs	$	3,928		$	1,455
	Current accrued pension liabilities		(3,695	)		(2,646	)
	Long-term accrued pension liabilities		(32,903	)		(28,175	)
	Intangible asset		3,259			2,967
	Accumulated other comprehensive loss		29,193			25,208
	Net amount recognized	$	(218	)	$	(1,191	)
Weighted-average assumptions used to determine benefit obligations at December 31:
	Discount rate		6.75%			6.25%
	Rate of compensation increase		3.75% - 4%			3.75% - 4%

F-39

        The accumulated benefit obligation for all defined benefit pension plans was $80,886,000 and $85,663,000 at December 31, 2002 and 2003, respectively. Information for pension plans with an accumulated benefit obligation in excess of plan assets was as follows:

	December 31,
	2002		2003
	(Dollars in Thousands)
Projected benefit obligation	$	82,007	$	86,821
Accumulated benefit obligation		80,886		85,663
Fair value of plan assets		48,216		56,409

		Years Ended December 31,
		2001			2002			2003
		(Dollars In Thousands)
Components of net periodic benefit cost:
	Service cost	$	1,439		$	1,609		$	1,642
	Interest cost		5,270			5,401			5,322
	Expected return on plan assets		(6,090	)		(5,155	)		(4,221	)
	Amortization of prior service cost		(86	)		206			206
	Amortization of net actuarial loss		—			723			2,018
	Total benefit cost	$	533		$	2,784		$	4,967
Increase (decrease) in minimum liability included in other comprehensive income (loss)		$	15,245		$	13,948		$	(3,985	)
Weighted-average assumptions used to determine net periodic benefit cost for year:
	Discount rate		7.75%			7.25%			6.75%
	Expected return on plan assets		9%			9%			9%
	Rate of compensation increase		4.5%			3.75% - 4%			3.75% - 4%

        In selecting the expected long-term rate of return on assets, the Company considered the average rate of earnings expected on the classes of funds invested or to be invested to provide for the benefits of these plans. This included considering the trusts' targeted asset allocation for the year and the expected returns likely to be earned over the next 20 years. The assumptions used for the return of each asset class are conservative when compared to long-term historical returns.

F-40

        The Company's pension plans' weighted-average actual and targeted asset allocations by asset category at December 31, 2002 and 2003 are as follows:

		December 31,
		2002		2003
		(Dollars in Thousands)
Asset category:
Equity securities		65	%	65	%
Debt securities		35		35
Real estate		—		—
Other		—		—
	Total	100	%	100	%

        The desired investment objective is a long-term real rate of return on assets that is approximately 6% greater than the assumed rate of inflation measured by the Consumer Price Index, currently assumed to be about 3%. The target rate of return for the plans has been based upon an analysis of historical returns supplemented with an economic and structural review of each asset class. The Benefit Plan Committee of the Company realizes that market performance varies and that a 6% real rate of return may not be meaningful during some periods. The Benefit Plan Committee also realizes that historical performance is no guarantee of future performance.

        To achieve these goals the minimum and maximum allocation ranges for fixed securities and equity securities are as follows:

	Minimum		Maximum
Equity	63	%	67	%
Fixed	33	%	37	%
Cash equivalents	0	%	2	%

        Investment in international oriented equity funds is limited to a maximum of 18.25% of the equity range.

        The Company expects to contribute $4,857,000 to its pension plans in 2004.

        The Company has 401(k) Savings Plans available to substantially all United States employees. Matching employer contributions are made in accordance with plan provisions subject to certain limitations. Matching employer contributions made were $743,000, $720,000 and $757,000 in 2001, 2002 and 2003, respectively.

NOTE K—POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

        The Company provides certain health care benefits to age 65 and life insurance benefits for certain eligible retired United States employees. Substantially all current employees may become eligible for those benefits if they reach early retirement age while working for the Company. The measurement date is December 31.

F-41

        The following tables set forth the plan's status and amounts recognized in the consolidated financial statements at December 31, 2002 and 2003:

		December 31,
		2002			2003
		(Dollars in Thousands)
Change in benefit obligation:
	Benefit obligation at January 1	$	16,027		$	16,036
	Service cost		557			659
	Interest cost		1,054			1,135
	Plan participants' contributions		119			144
	Net actuarial loss		395			2,565
	Benefits paid		(2,116	)		(1,618	)
	Benefit obligation at December 31		16,036			18,921
Change in plan assets:
	Fair value of plan assets at January 1		—			—
	Employer contributions		1,997			1,474
	Plan participants' contributions		119			144
	Benefits paid		(2,116	)		(1,618	)
	Fair value of plan assets at December 31		—			—
Net amount recognized:
	Funded status		(16,036	)		(18,921	)
	Unrecognized net actuarial loss		3,673			5,958
	Unrecognized prior service credit		(1,998	)		(1,777	)
	Net amount recognized	$	(14,361	)	$	(14,740	)
Amounts recognized in consolidated balance sheets at December 31:
	Accrued benefit liability	$	(1,610	)	$	(1,610	)
	Long-term benefit liability		(12,751	)		(13,130	)
	Net amount recognized	$	(14,361	)	$	(14,740	)
Weighted-average assumptions used to determine benefit obligations at December 31—discount rate			6.75	%		6.25	%

F-42

			Years Ended December 31,
			2001			2002			2003
			(Dollars In Thousands)
Components of net periodic benefit cost:
	Service cost		$	409		$	557		$	659
	Interest cost			929			1,054			1,135
	Amortization of prior service cost			(221	)		(221	)		(221	)
	Amortization of net actuarial loss			—			81			280
		Net periodic benefit cost	$	1,117		$	1,471		$	1,853
Weighted average assumptions used to determine net periodic benefit cost—discount rate				7.75	%		7.25	%		6.75	%
Assumed health care cost trend rates:
		Health care cost trend rate assumed for next year		10	%		9	%		8	%
		Rate to which the cost trend rate is assumed to decline		5	%		5	%		5	%
		Year that the rate reaches the ultimate trend rate		2007			2007			2007

        Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A one percentage point change in assumed health care cost trend rates would have the following effects:

	One Percentage Point Increase		One Percentage Point Decrease
	(Dollars in Thousands)
Effect on total of service and interest cost	$	170	$	(148	)
Effect on postretirement benefit obligation		1,479		(1,303	)

        The Company expects to contribute $1,707,000 for the payment of benefits from its postretirement benefit plan in 2004.

NOTE L—RESEARCH AND DEVELOPMENT

        Expenditures for design and development of new products and improvements of existing mining machinery products, including overhead, aggregated $5,900,000 in 2001, $6,512,000 in 2002 and in $4,594,000 in 2003. All engineering and product development costs are charged to selling, general and administrative expenses as incurred.

NOTE M—CALCULATION OF NET LOSS PER SHARE OF COMMON STOCK

        Basic and diluted net loss per share of common stock were computed by dividing net loss by the weighted average number of shares of common stock outstanding. The shares outstanding used to compute the diluted loss per share exclude outstanding options to purchase 1,600,000, 1,596,000 and 1,018,000 shares of the Company's common stock as of December 31, 2001, 2002 and 2003, respectively. The options were excluded because their inclusion would have been antidilutive.

NOTE N—SEGMENT AND GEOGRAPHICAL INFORMATION

        The Company designs, manufactures and markets large excavation machinery used for surface mining and supplies replacement parts and services for such machines. The Company manufactures its machines and replacement parts primarily at one location. There is no significant difference in the

F-43

production process for machines and replacement parts. The Company's products are sold primarily to large companies and quasi-governmental entities engaged in the mining of copper, coal, oil sands and iron ore throughout the world. New equipment and replacement parts and services are sold in North America primarily by Company personnel and its domestic subsidiaries, and overseas by Company personnel and through independent sales representatives and the Company's foreign subsidiaries and offices.

        Based on the above, the Company's operations are classified as one operating segment.

        The following table summarizes the Company's sales:

	Years Ended December 31,
	2001		2002		2003
	(Dollars In Thousands)
Machines	$	64,552	$	47,551	$	65,548
Parts and services		226,024		242,047		272,147
	$	290,576	$	289,598	$	337,695

        Financial information by geographical area is set forth in the following table. In the case of sales to external customers, the amounts presented represent the sales originating in the respective geographic area. Information for 2001 and 2002 has been modified to separately disclose amounts for Africa and Chile.

		Sales to External Customers		Long-Lived Assets
		(Dollars in Thousands)
2001
	United States	$	153,805	$	66,075
	Africa		16,721		478
	Australia		35,870		269
	Chile		35,660		3,711
	Canada		30,910		4,719
	Other Foreign		17,610		1,951
		$	290,576	$	77,203
2002
	United States	$	140,326	$	51,964
	Africa		20,205		691
	Australia		33,357		247
	Chile		42,163		3,539
	Canada		32,204		4,550
	Other Foreign		21,343		1,488
		$	289,598	$	62,479
2003
	United States	$	155,538	$	45,729
	Africa		36,501		811
	Australia		37,813		244
	Chile		48,249		3,877
	Canada		36,328		5,515
	Other Foreign		23,266		1,257
		$	337,695	$	57,433

F-44

        The Company does not consider itself to be dependent upon any single customer or group of customers; however, on an annual basis a single customer may account for a large percentage of sales, particularly new machine sales. In 2001, 2002 and 2003, one customer accounted for approximately 11%, 12% and 17%, respectively, of the Company's consolidated sales.

NOTE O—COMMITMENTS, CONTINGENCIES AND CREDIT RISKS

Environmental

        The Company's operations and properties are subject to a broad range of federal, state, local and foreign laws and regulations relating to environmental matters, including laws and regulations governing discharges into the air and water, the handling and disposal of solid and hazardous substances and wastes, and the remediation of contamination associated with releases of hazardous substances at the Company's facilities and at off-site disposal locations. These laws are complex, change frequently and have tended to become more stringent over time. Future events, such as compliance with more stringent laws or regulations, more vigorous enforcement policies of regulatory agencies or stricter or different interpretations of existing laws, could require additional expenditures by the Company, which may be material.

        Environmental problems have not interfered in any material respect with the Company's manufacturing operations to date. The Company believes that its compliance with statutory requirements respecting environmental quality will not materially affect its capital expenditures, earnings or competitive position. The Company has an ongoing program to address any potential environmental problems.

        Certain environmental laws, such as CERCLA, provide for strict, joint and several liability for investigation and remediation of spills and other releases of hazardous substances. Such laws may apply to conditions at properties currently or formerly owned or operated by an entity or its predecessors, as well as to conditions at properties at which wastes or other contamination attributable to an entity or its predecessors come to be located.

        The Company is one of 53 entities named by the United States Environmental Protection Agency, ("EPA") as potentially responsible parties, or PRP, with regard to the Millcreek dumpsite, located in Erie County, Pennsylvania, which is on the National Priorities List of sites for cleanup under CERCLA. We were named as a result of allegations that it disposed of foundry sand at the site in the 1970's. Both the United States government and the Commonwealth of Pennsylvania initiated actions to recover cleanup costs. The Company has settled both actions with respect to its liability for past costs. In addition, 37 PRPs, including the Company, received administrative orders issued by EPA pursuant to Section 106(a) of CERCLA to perform site capping and flood control remediation at the Millcreek site. The Company was one of eighteen parties responsible for a share of the cost of such work, and has shared such cost per capita to date; however, such cost may be subject to reallocation. In 2002, final remedial work in the form of installation of a municipal golf course as cover was completed and the cost thereof was paid. The EPA has certified completion and its approval thereof. The former remediation contractor, IT Corporation, commenced suit against the Millcreek Dumpsite Group, an unincorporated association including the Company and other cooperating Millcreek PRPs, (the "Group") for breach of contract claims in an amount in excess of $1,000,000. The Group is defending and negotiating settlement of the claim. At December 31, 2003, the Company does not believe that its remaining potential liability in

F-45

connection with this site will have material effect on its financial position, results of operations or cash flows, although no assurance can be given to that effect.

        The Company has also been named as PRP in two additional CERCLA matters. The EPA named the Company as a PRP with respect to the clean up of the Chemical Recovery Systems, Inc., or ("CRS"), site in Elyria, Ohio. On December 20, 2003, EPA offered the Company a de minimis settlement in the amount of $6,800 to resolve its liabilities under CERCLA Sections 106, 107 and 113. The Company accepted EPA's settlement offer and is awaiting notification from EPA that the settlement is effective. As of December 31, 2003, the Company does not believe that its remaining potential liability in connection with this site will have a material effect on its financial position, results of operations or cash flows, although no assurance can be given to that effect.

        EPA also named the Company as a PRP in the Tremont City, Ohio, landfill matter. The EPA identified the Company as a PRP based upon past operations of the Marion Power Shovel Company, the assets of which the Company acquired in 1997 pursuant to the Asset Purchase and Sale Agreement. The Company responded that it has not operated The Marion Power Shovel Company, that the periods of operation of the Tremont City landfill expired many years prior to 1997 and that, accordingly, it has none of the information requested by the EPA. The Company gave notice of this matter and potential claim to Global Industrial Technologies, Inc., ("Global") under indemnification provisions of the Asset Purchase and Sale Agreement. In 2002, the Company received notice that Global had filed for bankruptcy under Chapter 11 under federal bankruptcy laws. The Company has filed timely claims in that proceeding. Attorneys for Global have participated in a group of potential responsible parties in connection with EPA's investigation of the Tremont City landfill; the Company has not had further contact from EPA concerning this matter. Although the Company has not regarded, and does not regard, this site as presenting a material contingent liability, there can be no assurances to that effect because the EPA has not responded to the Company nor has the EPA withdrawn its identification of the Company as a PRP.

        On March 24, 2003, EPA sent a Request for Information pursuant to CERCLA Section 104 and RCRA Section 3007 to Minserco, Inc., ("Minserco"), a wholly-owned subsidiary of the Company, seeking information concerning Minserco's involvement with Sadler drum site in Mulberry, Polk County, Florida. Minserco responded that it had purchased drums from Sadler Drum, but did not send any drums to the site or return to Sadler Drum any drums it purchased. EPA has not responded to Minserco's infromation. The Company is aware that EPA has spent approximately $600,000 for environmental cleanup at the Sadler Drum site, but has not receieved any indication whether PRPs will be asked to investigate or remediate.

        In December 1990, the Wisconsin Department of Natural Resources, ("DNR"), conducted a pre-remedial screening site inspection on property owned by the Company located at 1100 Milwaukee Avenue in South Milwaukee, Wisconsin. Approximately 35 acres of this site were allegedly used as a landfill by the Company until approximately 1983. The Company disposed of certain manufacturing wastes at the site, primarily foundry sand. The DNR's final site screening eport, dated April 16, 1993, summarized the results of additional investigation. A DNR Decision Memo, dated July 21, 1991, which was based upon the testing results contained in the final site screening report, recommended additional groundwater, suface water, sediment and soil sampling. To date, the Company is not aware of any initiative by the DNR to require any further action with respect to this site. Consequently, the Company has not regarded, and does not regard, this site as

F-46

presenting a material contingent liability. There can be no assurance, however, that additional investigation by DNR will not be conducted with respect to this site at a later date or that this site will not in the future require removal or remedial actions to be performed by the Company, the costs of which could be material, depending on the circumstances.

        The Company has previously been named as a potentially responsible party under CERCLA and analogous state laws at other sites. The Company believes it has determined its remediation liabilities with respect to the sites discussed above and does not believe that any such remaining liabilities, if any, either individually or in the aggregate, will have a material adverse effect on its business, financial condition, results of operations or cash flows. The Company cannot, however, assure that it will not incur additional liabilities with respect to these sites in the future, the costs of which could be material, nor can it assure that it will not incur remediation liability in the future with respect to sites formerly or currently owned or operated by it or with respect to off-site disposal locations, the costs of which could be material.

        Over the past three years, expenditures for ongoing compliance, remediation, monitoring and clean-up have been immaterial. While no assurance can be given, the Company believes that expenditures for compliance and remediation will not have a material effect on its future capital expenditures, results of operations or competitive position.

Product Warranty

        The Company recognizes the cost associated with its warranty policies on its products at the time of sale. The amount recognized is based on historical experience. The following is a reconciliation of the changes in accrued warranty costs for the years ended December 31, 2002 and 2003:

	December 31,
	2002			2003
	(Dollars in Thousands)
Balance at January 1	$	2,951		$	3,597
Provision		3,793			2,998
Charges		(3,147	)		(2,284	)
Balance at December 31	$	3,597		$	4,311

Product Liability

        The Company is normally subject to numerous product liability claims, many of which relate to products no longer manufactured by the Company or its subsidiaries, and other claims arising in the ordinary course of business. The Company has insurance covering most of said claims, subject to varying deductibles up to $3,000,000, and has various limits of liability depending on the insurance policy year in question. It is the view of management that the final resolution of said claims and other similar claims which are likely to arise in the future will not individually or in the aggregate have a material effect on the Company's financial position, results of operations or cash flows, although no assurance to that effect can be given.

F-47

Asbestos Liability

        The Company has been named as a co-defendant in approximately 289 personal injury liability cases alleging damages due to exposure to asbestos and other substances, involving approximately 1,478 plaintiffs. The cases are pending in courts in nine states. In all of these cases, insurance carriers have accepted or are expected to accept defense. These cases are in various pre-trial stages. The Company does not believe that costs associated with these matters will have a material effect on its financial position, results of operations or cash flows, although no assurance to that effect can be given.

        A reconciliation of claims pending at December 31, 2003 and 2002 is as follows:

	December 31,
	2002		2003
Number of claims pending at January 1,	274		275
New claims filed	7		23
Claims dismissed, settled or resolved	(6	)	(9	)
Number of claims pending at December 31,	275		289

        The average claim settlement amount was immaterial in both years.

Other Litigation

        A wholly-owned subsidiary of the Company is a defendant in a suit pending in the United States District Court for the Western District of Pennsylvania, brought on June 15, 2002, relating to an incident in which a dragline operated by an employee of a Company subsidiary tipped over. The customer has sued an unaffiliated third party on a negligence theory for property damages and business interruption losses in a range of approximately $25,000,000 to $27,000,000. The unrelated third party has brought a third-party over action against the Company's subsidiary. The Company's insurance carriers are defending the claim, but have not conceded that the relevant policies cover the claim. At this time discovery is ongoing and it is not possible to evaluate the outcome of the claim nor the range of potential loss, if any.

        Prior to 1985, a wholly-owned, indirect subsidiary of the Company provided comprehensive general liability insurance coverage for affiliate corporations and invested in risk pools as part of its reinsurance activities. The subsidiary issued policies for occurrences during the years 1974 to 1984, which policies, together with its risk pool investments, could involve material liability. It is possible that claims could be asserted in the future with respect to such policies or risk pools. While the Company does not believe that liability under such policies or risk pools will result in material costs, this cannot be guaranteed.

        The Company is involved in various other litigation arising in the normal course of business. It is the view of management that the Company's recovery or liability, if any, under pending litigation is not expected to have a material effect on the Company's financial position, results of operations or cash flows, although no assurance to that effect can be given.

F-48

Commitments

        The Company has obligations under various operating leases and rental and service agreements. The expense relating to these agreements was $3,616,000 in 2001, $5,940,000 in 2002 and $5,899,000 in 2003. Future minimum annual payments under noncancellable agreements, including the sale and leaseback agreement (see Note E), are as follows:

	(Dollars in Thousands)
2004	$	5,897
2005		4,199
2006		2,162
2007		1,597
2008		1,341
After 2008		15,976
	$	31,172

Management Services Agreement

        Holdings is controlled by AIP. AIP provides ongoing financial and management services to the Company utilizing the extensive operating and financial experience of AIP's principals pursuant to a management services agreement among AIP, the Company and the Guarantor Subsidiaries. Payment of the annual fee is subordinated in right of payment to the Loan and Security Agreement. At December 31, 2002 and 2003, $4,364,000 and $5,527,000, respectively, was deferred and payable to AIP under this agreement and is included in payable to American Industrial Partners in the Consolidated Balance Sheets. In addition, at December 31, 2002 and 2003, $885,000 and $432,000, respectively, was currently payable under this agreement and is included in accrued expenses in the Consolidated Balance Sheets. The expense recognized related to this agreement was $1,587,000 in 2001, $1,610,000 in 2002 and $3,185,000 in 2003.

Credit Risks

        A significant portion of the Company's consolidated sales are to customers whose activities are related to the coal, copper and iron ore mining industries, including some who are located in foreign countries. The Company generally extends credit to these customers and, therefore, collection of receivables may be affected by the mining industry economy and the economic conditions in the countries where the customers are located. However, the Company closely monitors extension of credit and has not experienced significant credit losses. Also, most foreign sales are made to large, well-established companies. The Company generally requires letters of credit on foreign sales to smaller companies.

NOTE P—RESTRUCTURING

        Due to low levels of new orders, the Company continues to reduce a portion of its workforce through layoffs and permanent reductions in the number of its salaried employees. These activities resulted in restructuring charges of $899,000, $1,308,000 and $571,000 during the years ended December 31, 2001, 2002 and 2003, respectively. Such charges primarily relate to severance payments and are included in selling, general and administrative expenses in the Consolidated Statement of Operations. Substantially all of these restructuring charges were paid in the year incurred.

F-49

NOTE Q—OTHER INCOME

        In December 2001, the Company, as a policyholder, received an allocation of 369,918 shares as a result of the demutualization of The Principal Financial Group. Net proceeds from the sale of these shares by the Company were $8,704,000 and is recognized as Other (Income) Expense—Net in the Consolidated Statement of Operations for the year ended December 31, 2001.

NOTE R—SUPPLEMENTAL CONSOLIDATING CONDENSED FINANCIAL INFORMATION

        The Company's payment obligations under the Senior Notes are guaranteed by the Guarantor Subsidiaries. Such guarantees are full, unconditional and joint and several. Separate financial statements of the Guarantor Subsidiaries are not presented because the Company's management has determined that they would not be material to investors. The following supplemental financial information sets forth, on an unconsolidated basis, statement of operations, balance sheet and statement of cash flow information for the Company (the "Parent Company"), for the Guarantor Subsidiaries (representing all of the Company's U.S. subsidiaries) and for the Company's non-guarantor subsidiaries (representing all of the Company's non-U.S. subsidiaries, the "Other Subsidiaries"). The supplemental financial information reflects the investments of the Company in the Guarantor and Other Subsidiaries using the equity method of accounting. The Company has determined that it is not practicable to allocate goodwill, intangible assets and deferred income taxes to the Guarantor Subsidiaries and Other Subsidiaries. Parent Company amounts for net earnings (loss) and common shareholders' investment differ from consolidated amounts as intercompany profit in subsidiary inventory has not been eliminated in the Parent Company statement but has been eliminated in the Consolidated Totals.

F-50

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2001

(Dollars in Thousands)

	Parent Company			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidated Total
Sales	$	151,036		$	51,080		$	144,616		$	(56,156	)	$	290,576
Cost of products sold		130,495			49,354			120,023			(56,081	)		243,791
Gross profit		20,541			1,726			24,593			(75	)		46,785
Selling, general and administrative expenses		13,227			937			16,642			—			30,806
Research and development expenses		5,900			—			—			—			5,900
Amortization of intangible assets (including goodwill)		4,292			—			—			—			4,292
Operating earnings (loss)		(2,878	)		789			7,951			(75	)		5,787
Interest expense		20,697			1,679			3,026			(4,517	)		20,885
Other (income) expense—net		(11,665	)		(51	)		(846	)		4,517			(8,045	)
Earnings (loss) before income taxes and equity in net earnings of consolidated subsidiaries		(11,910	)		(839	)		5,771			(75	)		(7,053	)
Income taxes		511			23			2,876			—			3,410
Earnings (loss) before equity in net earnings of consolidated subsidiaries		(12,421	)		(862	)		2,895			(75	)		(10,463	)
Equity in net earnings of consolidated subsidiaries		2,033			—			—			(2,033	)		—
Net earnings (loss)	$	(10,388	)	$	(862	)	$	2,895		$	(2,108	)	$	(10,463	)

F-51

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2002

(Dollars in Thousands)

	Parent Company			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidated Total
Sales	$	148,559		$	46,890		$	155,481		$	(61,332	)	$	289,598
Cost of products sold		122,167			46,500			125,127			(60,278	)		233,516
Gross profit		26,392			390			30,354			(1,054	)		56,082
Selling, general and administrative expenses		13,001			1,940			17,273			—			32,214
Reasearch and development expenses		6,512			—			—			—			6,512
Amortization of intangible assets		1,647			—			—			—			1,647
Operating earnings (loss)		5,232			(1,550	)		13,081			(1,054	)		15,709
Interest expense		19,403			1,368			1,917			(4,016	)		18,672
Other (income) expense—net		65			(3	)		(1,302	)		4,016			2,776
Earnings (loss) before income taxes and equity in net earnings of consolidated subsidiaries		(14,236	)		(2,915	)		12,466			(1,054	)		(5,739	)
Income taxes (benefit)		(8	)		24			5,031			—			5,047
Earnings (loss) before equity in net earnings of consolidated subsidiaries		(14,228	)		(2,939	)		7,435			(1,054	)		(10,786	)
Equity in net earnings of consolidated subsidiaries		4,496			—			—			(4,496	)		—
Net earnings (loss)	$	(9,732	)	$	(2,939	)	$	7,435		$	(5,550	)	$	(10,786	)

F-52

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2003

(Dollars in Thousands)

	Parent Company			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidated Total
Sales	$	189,402		$	38,012		$	185,864		$	(75,583	)	$	337,695
Cost of products sold		147,247			36,523			157,303			(72,911	)		268,162
Gross profit		42,155			1,489			28,561			(2,672	)		69,533
Selling, general and administrative expenses		21,193			1,993			19,837			(276	)		42,747
Research and development expenses		4,594			—			—			—			4,594
Amortization of intangible assets		1,647			—			—			—			1,647
Operating earnings (loss)		14,721			(504	)		8,724			(2,396	)		20,545
Interest expense		19,151			1,375			1,927			(4,766	)		17,687
Other (income) expense—net		(1,782	)		(3	)		(2,125	)		4,766			856
Earnings (loss) before income taxes and equity in net earnings of consolidated subsidiaries		(2,648	)		(1,876	)		8,922			(2,396	)		2,002
Income taxes		875			24			4,684			—			5,583
Earnings (loss) before equity in net earnings of consolidated subsidiaries		(3,523	)		(1,900	)		4,238			(2,396	)		(3,581	)
Equity in net earnings of consolidated subsidiaries		2,338			—			—			(2,338	)		—
Net earnings (loss)	$	(1,185	)	$	(1,900	)	$	4,238		$	(4,734	)	$	(3,581	)

F-53

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATING CONDENSED BALANCE SHEET

DECEMBER 31, 2002

(DOLLARS IN THOUSANDS)

			Parent Company		Guarantor Subsidiaries			Other Subsidiaries		Eliminations			Consolidated Total
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	—	$	24		$	4,165	$	—		$	4,189
	Receivables—net			20,100		6,006			26,664		—			52,770
	Intercompany receivables			76,916		347			24,222		(101,485	)		—
	Inventories			63,648		7,493			49,705		(6,534	)		114,312
	Prepaid expenses and other current assets			845		311			5,030		—			6,186
		Total Current Assets		161,509		14,181			109,786		(108,019	)		177,457
OTHER ASSETS:
	Restricted funds on deposit			758		—			727		—			1,485
	Goodwill			55,660		—			200		—			55,860
	Intangible assets—net			37,662		—			—		—			37,662
	Other assets			10,135		—			1,800		—			11,935
	Investment in subsidiaries			13,525		—			—		(13,525	)		—
				117,740		—			2,727		(13,525	)		106,942
PROPERTY, PLANT AND EQUIPMENT—net				45,098		6,866			10,515		—			62,479
			$	324,347	$	21,047		$	123,028	$	(121,544	)	$	346,878
LIABILITIES AND COMMON SHAREHOLDERS' INVESTMENT (DEFICIT)
CURRENT LIABILITIES:
	Accounts payable and accrued expenses		$	40,390	$	2,103		$	17,009	$	(286	)	$	59,216
	Intercompany payables			117		27,915			70,855		(98,887	)		—
	Liabilities to customers on uncompleted contracts and warranties			4,584		286			2,980		—			7,850
	Income taxes			335		29			3,079		—			3,443
	Short-term obligations			—		—			495		—			495
	Current maturities of long-term debt			126		44			261		—			431
		Total Current Liabilities		45,552		30,377			94,679		(99,173	)		71,435
LONG-TERM LIABILITIES:
	Liabilities to customers on uncompleted contracts and warranties			2,000		—			—		—			2,000
	Postretirement benefits			12,381		—			370		—			12,751
	Deferred expenses, pension and other			36,876		335			1,008		—			38,219
	Payable to American Industrial Partners			4,364		—			—		—			4,364
	Interest payable to Holdings			18,436		—			—		—			18,436
				74,057		335			1,378		—			75,770
LONG-TERM DEBT, less current maturities (includes $75,635 of Senior Notes held by Holdings)				204,023		1,226			2,555		—			207,804
COMMON SHAREHOLDERS' INVESTMENT (DEFICIT)				715		(10,891	)		24,416		(22,371	)		(8,131	)
			$	324,347	$	21,047		$	123,028	$	(121,544	)	$	346,878

F-54

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATING CONDENSED BALANCE SHEET

December 31, 2003

(Dollars in Thousands)

			Parent Company		Guarantor Subsidiaries			Other Subsidiaries		Eliminations			Consolidated Total
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	—	$	16		$	7,222	$	(1,163	)	$	6,075
	Receivables—net			24,325		8,687			39,335		764			73,111
	Intercompany receivables			84,418		632			31,833		(116,883	)		—
	Inventories			58,405		5,980			60,132		(8,619	)		115,898
	Prepaid expenses and other current assets			1,722		56			6,431		—			8,209
		Total Current Assets		168,870		15,371			144,953		(125,901	)		203,293
OTHER ASSETS:
	Restricted funds on deposit			245		—			333		—			578
	Goodwill			55,660		—			200		—			55,860
	Intangible assets—net			35,724		—			—		—			35,724
	Other assets			7,184		—			2,071		—			9,255
	Investment in subsidiaries			26,618		—			—		(26,618	)		—
				125,431		—			2,604		(26,618	)		101,417
PROPERTY, PLANT AND EQUIPMENT—net				39,701		6,028			11,704		—			57,433
			$	334,002	$	21,399		$	159,261	$	(152,519	)	$	362,143
LIABILITIES AND COMMON SHAREHOLDERS' INVESTMENT (DEFICIT)
CURRENT LIABILITIES:
	Accounts payable and accrued expenses		$	39,929	$	2,584		$	17,097	$	(19	)	$	59,591
	Intercompany payables			—		29,311			88,178		(117,489	)		—
	Liabilities to customers on uncompleted contracts and warranties			11,522		628			6,880		—			19,030
	Income taxes			478		45			3,791		—			4,314
	Borrowings under senior secured revolving credit facility and other short-term obligations			37,420		—			—		—			37,420
	Current maturities of long-term debt			—		49			327		—			376
		Total Current Liabilities		89,349		32,617			116,273		(117,508	)		120,731
LONG-TERM LIABILITIES:
	Liabilities to customers on uncompleted contracts and warranties			800		—			—		—			800
	Postretirement benefits			12,801		—			329		—			13,130
	Deferred expenses, pension and other			31,599		397			453		—			32,449
	Payable to American Industrial Partners			5,527		—			—		—			5,527
	Interest payable to Holdings			25,810		—			—		—			25,810
				76,537		397			782		—			77,716
LONG-TERM DEBT, less current maturities (including $75,635 of Senior Notes held by Holdings)				150,000		1,176			2,797		—			153,973
COMMON SHAREHOLDERS' INVESTMENT (DEFICIT)				18,116		(12,791	)		39,409		(35,011	)		9,723
			$	334,002	$	21,399		$	159,261	$	(152,519	)	$	362,143

F-55

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2001

(Dollars in Thousands)

		Parent Company			Guarantor Subsidiaries			Other Subsidiaries			Eliminations		Consolidated Total
Net Cash Provided By (Used In) Operating Activities		$	(3,626	)	$	600		$	1,717		$	—	$	(1,309	)
Cash Flows From Investing Activities:
	Decrease (increase) in restricted funds on deposit		308			—			(340	)		—		(32	)
	Proceeds from sale of The Principal Financial Group shares		5,730			—			—			—		5,730
	Purchases of property, plant and equipment		(1,990	)		(968	)		(1,169	)		—		(4,127	)
	Proceeds from sale of property, plant and equipment		23			—			513			—		536
	Dividends paid to parent		200			—			(200	)		—		—
Net cash provided by (used in) investing activities			4,271			(968	)		(1,196	)		—		2,107
Cash Flows From Financing Activities:
	Proceeds from (repayments of) revolving credit facilities		(1,350	)		—			298			—		(1,052	)
	Net increase (decrease)in other bank borrowings		(52	)		—			323			—		271
	Proceeds from issuance of long-term debt		—			360			877			—		1,237
	Payment of long-term debt		(336	)		—			(1,305	)		—		(1,641	)
	Capital contribution from Holdings		1,093			—			—			—		1,093
Net cash provided by (used in) financing activities			(645	)		360			193			—		(92	)
Effect of exchange rate changes on cash			—			—			(436	)		—		(436	)
Net increase (decrease) in cash and cash equivalents			—			(8	)		278			—		270
Cash and cash equivalents at beginning of year			—			36			6,912			—		6,948
Cash and cash equivalents at end of year		$	—		$	28		$	7,190		$	—	$	7,218

F-56

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2002

(Dollars in Thousands)

		Parent Company			Guarantor Subsidiaries			Other Subsidiaries			Eliminations		Consolidated Total
Net Cash Provided By Operating Activities		$	4,579		$	683		$	4,443		$	—	$	9,705
Cash Flows From Investing Activities:
	Increase in restricted funds on deposit		(716	)		—			(187	)		—		(903	)
	Proceeds from the sale of The Principal Financial Group shares		2,974			—			—			—		2,974
	Purchases of property, plant and equipment		(2,697	)		(1,598	)		(1,162	)		—		(5,457	)
	Proceeds from sale of property, plant and equipment		363			2			380			—		745
	Net proceeds from sale and leaseback transaction		6,657			—			—			—		6,657
	Purchase of Bennett & Emmott (1986) Ltd.		—			—			(200	)		—		(200	)
	Dividends paid to parent		99			—			(99	)		—		—
Net cash provided by (used in) investing activities			6,680			(1,596	)		(1,268	)		—		3,816
Cash Flows From Financing Activities:
	Net repayments of revolving credit facilities		(9,077	)		—			(5,732	)		—		(14,809	)
	Net increase (decrease) in other bank borrowings		—			—			(71	)		—		(71	)
	Proceeds from issuance of long-term debt		—			925			—			—		925
	Payment of long-term debt		(236	)		(16	)		(549	)		—		(801	)
	Payment of refinancing expenses		(1,946	)		—			(101	)		—		(2,047	)
Net cash provided by (used in) financing activities			(11,259	)		909			(6,453	)		—		(16,803	)
Effect of exchange rate changes on cash			—			—			253			—		253
Net decrease in cash and cash equivalents			—			(4	)		(3,025	)		—		(3,029	)
Cash and cash equivalents at beginning of year			—			28			7,190			—		7,218
Cash and cash equivalents at end of year		$	—		$	24		$	4,165		$	—	$	4,189

F-57

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2003

(Dollars in Thousands)

		Parent Company			Guarantor Subsidiaries			Other Subsidiaries			Eliminations			Consolidated Total
Net Cash Provided By (Used In) Operating Activities		$	13,684		$	237		$	10,180		$	(1,163	)	$	22,938
Cash Flows From Investing Activities:
	Decrease in restricted funds on deposit		513			—			394			—			907
	Purchases of property, plant and equipment		(3,531	)		(74	)		(973	)		—			(4,578	)
	Proceeds from sale of property, plant and equipment		284			—			84			—			368
	Dividends paid to parent		7,107			—			(7,107	)		—			—
Net cash provided by (used in) investing activities			4,373			(74	)		(7,602	)		—			(3,303	)
Cash Flows From Financing Activities:
	Net repayments of senior secured revolving credit facility		(16,603	)		—			—			—			(16,603	)
	Net decrease in other bank borrowings		—			—			(494	)		—			(494	)
	Payment of long-term debt		—			(171	)		(268	)		—			(439	)
	Payment of refinancing expenses		(1,526	)		—			—			—			(1,526	)
	Proceeds from issuance of common stock		72			—			—			—			72
Net cash provided by (used in) financing activities			(18,057	)		(171	)		(762	)		—			(18,990	)
Effect of exchange rate changes on cash			—			—			1,241			—			1,241
Net increase (decrease) in cash and cash equivalents			—			(8	)		3,057			(1,163	)		1,886
Cash and cash equivalents at beginning of year			—			24			4,165			—			4,189
Cash and cash equivalents at end of year		$	—		$	16		$	7,222		$	(1,163	)	$	6,075

F-58

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of
Bucyrus International, Inc.:

        We have audited the accompanying consolidated balance sheets of Bucyrus International, Inc. and subsidiaries (the "Company"), a majority-owned subsidiary of Bucyrus Holdings, LLC, as of December 31, 2003 and 2002, and the related consolidated statements of operations, comprehensive income (loss), shareholders' investment (deficit), and cash flows for the years then ended. Our audits also included the accompanying financial statement schedules for the years ended December 31, 2003 and 2002. These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the 2003 and 2002 financial statements and financial statement schedules based on our audits. The financial statements and financial statement schedule for the year ended December 31, 2001, before the reclassifications, inclusion of certain disclosures, and adjustments discussed in Notes A, D, and N to the financial statements were audited by other auditors who have ceased operations. Those auditors expressed an unqualified opinion on those financial statements and stated that such 2001 financial statement schedule fairly states, in all material respects, the financial data required to be set forth therein in relation to the 2001 basic consolidated financial statements taken as a whole, in their report dated February 8, 2002 (except with respect to the matter discussed in Note G as to which the date is March 7, 2002).

        We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, such 2003 and 2002 consolidated financial statements present fairly, in all material respects, the financial position of Bucyrus International, Inc. and subsidiaries as of December 31, 2003 and 2002, and the results of their operations and their cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such 2003 and 2002 financial statement schedules, when considered in relation to the 2003 and 2002 basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

        As described in Note D to the consolidated financial statements, on January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS No. 142").

        As discussed above, the financial statements of Bucyrus International, Inc. and subsidiaries for the year ended December 31, 2001, were audited by other auditors who have ceased operations. As described in Note A, those financial statements have been reclassified to include additional disclosures relating to the components comprising gross profit, selling, general and administrative expenses, amortization of intangible assets, operating earnings, and other income (expense), net. Our audit procedures with respect to the 2001 disclosures described in Note A included (1) comparing the previously reported other income and engineering and field service, selling, administrative and miscellaneous expenses to previously issued financial statements, (2) comparing the gross profit, selling, general and administrative expenses, amortization of intangible assets, operating earnings, and other income (expense), net to the Company's underlying analysis obtained from management, and (3) testing the mathematical accuracy of the underlying analysis.

F-59

Also, as described in Note A, the 2001 financial statements have been revised to give effect to the stock split on June 9, 2004 discussed in Note A. We audited the adjustments described in Note A that were applied to revise the 2001 financial statements for such stock split. Our audit procedures included (1) comparing the amounts shown in the loss per share disclosures for 2001 to the Company's underlying accounting analysis obtained from management, (2) comparing the previously reported shares outstanding and statement of operations amounts per the Company's accounting analysis to the previously issued financial statements, and (3) recalculating the additional shares to give effect to the stock split and testing the mathematical accuracy of the underlying analysis. In addition, as described in Note D, the 2001 financial statements have been revised to include the transitional disclosures required by SFAS No. 142, which was adopted by the Company as of January 1, 2002. Our audit procedures with respect to the disclosures in Note D with respect to 2001 included (1) comparing the previously reported net loss to the previously issued financial statements and the adjustments to reported net loss representing amortization expense (including any related tax effects) recognized in 2001 related to goodwill and intangible assets that are no longer being amortized as a result of initially applying SFAS No. 142 (including any related tax effects) to the Company's underlying analysis obtained from management; and (2) testing the mathematical accuracy of the reconciliation of adjusted net loss to reported net loss and the related loss-per share amounts. Further, as described in Note N, the Company changed the composition of the geographic information presented in 2003 to separately present information for Africa and Chile, and the amounts disclosed in the 2002 and 2001 financial statements relating to geographic information have been restated to conform to the 2003 composition of geographic information. Our procedures included (1) comparing the amounts of sales and long-lived assets to the Company's underlying analysis obtained from management, and (2) testing the mathematical accuracy of the reconciliation of the geographic amounts to the consolidated financial statements. In our opinion, the reclassifications and adjustments described in Notes A and N for 2001 have been properly applied, and the disclosures for 2001 in Note D are appropriate. However, we were not engaged to audit, review, or apply any procedures to the 2001 financial statements of the Company other than with respect to such reclassifications, adjustments and disclosures and, accordingly, we do not express an opinion or any other form of assurance on the 2001 financial statements taken as a whole.

/s/Deloitte & Touche LLP

Milwaukee, Wisconsin

March 26, 2004 (June 9, 2004, as to the effects of the stock split described in Note A)

F-60

        The report set forth below is a copy of a previously issued audit report by Arthur Andersen LLP. This report has not been reissued by Arthur Andersen LLP in connection with its inclusion in this Registration Statement. During the year ended December 31, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142"). As discussed in Note D of the Notes to Consolidated Financial Statements, the Company has presented the transitional disclosures for the years ended December 31, 2001 required by SFAS 142. In addition, as discussed in Notes A and N of the Notes to the Consolidated Financial Statements, the 2001 financial statements have been reclassified to reflect the change in presentation of the Statements of Operations to provide additional geographic information to conform to the 2003 presentation and for the effect of the 8-for-1 stock split. The Arthur Andersen LLP report does not extend to these reclassifications and disclosures. These reclassifications and disclosures are reported on by Deloitte & Touche LLP as stated in their report appearing herein.

Report of Independent Public Accountants

To the Board of Directors and Shareholders of
Bucyrus International, Inc.:

        We have audited the accompanying consolidated balance sheets of Bucyrus International, Inc. (Delaware corporation) and subsidiaries as of December 31, 2001 and 2000 and the related consolidated statements of operations, comprehensive loss, common shareholders' investment and cash flows for the three years ended December 31, 2001. These financial statements and the schedule referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Bucyrus International, Inc. and subsidiaries as of December 31, 2001 and 2000, and the results of its operations and its cash flows for the three years ended December 31, 2001 in conformity with accounting principles generally accepted in the United States.

        Our audit was made for the purpose of forming an opinion on the consolidated financial statements taken as a whole. The schedule listed in the index at item 16(b) is presented for purposes of complying with the Securities and Exchange Commission's rules and is not part of the basic consolidated financial statements. This schedule for the three years ended December 31, 2001 has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole.

/s/ Arthur Andersen LLP ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin
February 8, 2002 (except with respect to the matter
discussed in Note G, as to which the date is
March 7, 2002)

F-61

BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

FOR THE YEARS ENDED DECEMBER 31, 2001, 2002 AND 2003

(DOLLARS IN THOUSANDS)

	Balance At Beginning Of Period		Charges (Credits) To Costs And Expenses		(Charges) Credits To Reserves(1)			Balance At End Of Period
Allowances for possible losses on notes and accounts receivable:
Year ended December 31, 2001	$	1,159	$	14	$	(39	)	$	1,134
Year ended December 31, 2002	$	1,134	$	47	$	(23	)	$	1,158
Year ended December 31, 2003	$	1,158	$	172	$	142		$	1,472

(1)

Includes effect of changes in foreign currency exchange rates.

F-62

Back:

        [Artwork depicting global installed base map.]

        [Artwork depicting comparative sizes of a dragline, shovel and blasthole drill relative to the Company's office facility, a 747 aircraft, an average house and a 5'10” man.]

        No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

TABLE OF CONTENTS

	Page
Sources of Market and Industry Data	ii
Prospectus Summary	1
Risk Factors	11
Forward-Looking Statements	20
Use of Proceeds	21
Dividend Policy	22
Capitalization	23
Dilution	24
Selected Consolidated Financial Data	25
Unaudited As Adjusted Financial Data	27
Management's Discussion and Analysis of Financial Condition and Results of Operations	32
Business	47
Management	66
Certain Relationships and Related Transactions	80
Principal Stockholders	82
Description of Capital Stock	84
Shares Eligible For Future Sale	90
Description of Indebtedness	92
Underwriting	94
Validity of Class A Common Stock	97
Experts	97
Where You Can Find More Information	98
Index to Financial Statements	F-1

7,941,177 Shares

Bucyrus International, Inc.

Class A Common Stock

Goldman, Sachs & Co.

Lehman Brothers

Legg Mason Wood Walker

Incorporated

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

        The following table sets forth the costs, other than underwriting discounts and commissions, payable by us in connection with the sale of the common stock being registered. All amounts, except the SEC registration fee, the NASD filing fee and the Nasdaq National Market listing fee, are estimates.

SEC registration fee	$	20,827.25
NASD filing fee	$	16,439
Nasdaq listing fee and expenses	$	21,000
Blue sky fees and expenses	$	10,000
Printing and engraving expenses	$	1,000,000
Legal fees and expenses	$	1,000,000
Accounting fees and expenses	$	550,000
Transfer agent and registrar fees	$	10,000
Miscellaneous	$	371,733.75
Total	$	3,000,000

*

To be furnished by amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

        Section 102 of the Delaware General Corporation Law, as amended, allows a corporation to eliminate the personal liability of a director of a corporation to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except where the director breached his or her duty of loyalty to the corporation or its stockholders, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock purchase or redemption in violation of Delaware corporate law or obtained an improper personal benefit.

        Section 145 of the Delaware General Corporation Law provides, among other things, that a corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of the corporation) by reason of the fact that the person is or was a director, officer, employee or agent of the corporation, or is or was serving at the corporation's request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses, including attorneys' fees, judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with the action, suit or proceeding. The power to indemnify applies (i) if such person is successful on the merits or otherwise in defense of any action, suit or proceeding or (ii) if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The power to indemnify applies to actions brought by or in the right of the corporation as well, but only to the extent of defense expenses, (including attorneys' fees but excluding amounts paid in settlement) actually and reasonably incurred by the indemnified person and not to any satisfaction of judgment or settlement of the claim itself, and with the further limitation that in such actions no indemnification shall be made in the event such person is adjudged liable to the

II-1

corporation unless a court believes that in light of all the circumstances indemnification should apply.

        Section 174 of the Delaware General Corporation Law provides, among other things, that a director who willfully and negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption may be held liable for such actions. A director who was either absent when the unlawful actions were approved or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing the minutes of the meetings of the board of directors at the time the action occurred or immediately after the absent director receives notice of the unlawful acts.

        Article Seventh of our certificate of incorporation provides that our directors shall not be personally liable to us and our stockholders for monetary damages for breach of fiduciary duty as a director, except for liability:

•

for any breach of the director's duty of loyalty to us or its stockholders;



•

for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;



•

under section 174 of the Delaware General Corporation Law regarding unlawful dividends and stock purchases; or



•

for any transaction from which the director derived an improper personal benefit.

        Our bylaws and certificate of incorporation provide that we may indemnify any person who is or was a director, officer, employee or agent of us to the fullest extent permitted by Delaware law. The indemnification provisions contained in our bylaws are not exclusive of any other rights to which a person may be entitled by law, agreement, vote of stockholders or disinterested directors or otherwise.

        Pursuant to the underwriting agreement, in the form filed as an exhibit to this registration statement, the underwriters will agree to indemnify directors and our officers and persons controlling us, within the meaning of the Securities Act against certain liabilities that might arise out of or are based upon certain information furnished to us by any such underwriter.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

        Set forth below in chronological order is information regarding the number of shares of capital stock, options and warrants issued by us since January 1, 2001. Also included is the consideration, if any, received by us for the securities.

        On August 1, 2001, we issued to Messrs. Sullivan, Phillips, Mackus, Bruno and Bosbous options to purchase 1,147,200 shares of our common stock under the 1998 Option Plan.

        In 2003, we issued 573,600 shares of common stock to officers and directors pursuant to exercise of options granted on August 1, 2001 under the 1998 Option Plan for aggregate consideration of $71,700.

        On April 28, 2004 we granted options for the purchase of a total of 8,400 shares of our common stock to Messrs. Swamy and Jelinek under the 1998 Option Plan.

        There was no public offering in any such transaction and we believe that each transaction was exempt from the registration requirements of the Securities Act by reason of Section 4(2) of the Securities Act, based on the private nature of the transactions and the financial sophistication of the purchasers, all of whom had access to complete information concerning us and acquired the securities for investment and not with a view to the public distribution thereof.

II-2

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a)

Exhibits.

Exhibit No.	Description
1	Form of Underwriting Agreement.*
2.1	Agreement and Plan of Merger, dated August 21, 1997, between Registrant, American Industrial Partners Acquisition Company, LLC and Bucyrus Acquisition Corp. (incorporated by reference herein to Exhibit 1 to Registrant's Schedule 14D-9, filed August 26, 1997).
2.2	Certificate of Merger, dated September 26, 1997, and filed with the Secretary of State of the State of Delaware on September 26, 1997 (incorporated by reference herein to Exhibit 2.2 to Registrant's Form 8-K, filed on October 10, 1997).
2.3	Second Amended Joint Plan of Reorganization of B-E Holdings, Inc. and Bucyrus- Erie Company under Chapter 11 of the Bankruptcy Code, as modified December 1, 1994, including Exhibits (incorporated by reference herein to Exhibit 2.1 to Registrant's Form 8-K, filed December 13, 1994).
2.4	Order, dated December 1, 1994, of the U.S. Bankruptcy Court, Eastern District of Wisconsin, confirming the Second Amended Joint Plan of Reorganization of B-E Holdings, Inc. and Bucyrus-Erie Company under Chapter 11 of the Bankruptcy Code, as modified December 1, 1994, including Exhibits (incorporated by reference herein to Exhibit 2.2 to Registrant's Form 8-K, filed December 13, 1994).
3.1	Restated Certificate of Incorporation (incorporated by reference herein to Exhibit 3.6 to Registrant's Form 10-K for the year ended December 31, 1998).
3.2	Certificate of Amendment to Restated Certificate of Incorporation.**
3.3	Bylaws.**
3.4	Form of Amended and Restated Certificate of Incorporation.
3.5	Form of Amended and Restated Bylaws.
4.1	Specimen Class A common stock certificate.*
4.2	Indenture, dated as of September 24, 1997, among Registrant, Boonville Mining Services, Inc., Minserco, Inc. and Von's Welding, Inc. and Harris Trust and Savings Bank, Trustee (incorporated by reference herein to Exhibit 4.1 to Registrant's Form S-4 (Commission file No. 333-39359), filed November 3, 1997).
4.3	Letter, dated February 15, 2000, evidencing change of Indenture Trustee (incorporated by reference herein Exhibit 4.1(a) to Registrant's Form S-4 (Commission file No. 333-39359), filed November 3, 1997).
4.4	Form of Guarantee of Boonville Mining Services, Inc., Minserco, Inc. and Von's Welding, Inc., dated as of September 24, 1997, in favor of Harris Trust and Savings Bank as Trustee under the Indenture (incorporated by reference herein to Exhibit 4.1 to Registrant's Form S-4 (Commission file No. 333-39359), filed November 3, 1997).
4.5	Form of Registrant's 9-3/4% Senior Note due 2007 (incorporated by reference herein to Exhibit 4.1 to Registrant's Form S-4 (Commission file No. 333-39359), filed November 3, 1997).
5	Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.*

II-3

10.1	Stockholders Agreement, dated as of March 17, 1998, among Registrant, American Industrial Partners Acquisition Company, LLC and each individual who executes a counterpart thereto (incorporated by reference herein to Exhibit 10.11 to Registrant's Form 10-K for the year ended December 31, 2003).
10.2	Management Services Agreement by and among Registrant, Boonville Mining Services, Inc., Minserco, Inc. and Von's Welding, Inc. and American Industrial Partners (incorporated by reference herein to Exhibit 10.2 to Registrant's Form S-4 (Commission file No. 333-39359), filed November 3, 1997).
10.3	Employment Agreement between Registrant and Craig R. Mackus, dated as of May 21, 1997 (incorporated by reference herein to Exhibit 10.17 to Registrant's Form 10-Q, filed August 14, 1997).
10.4	Annual Management Incentive Plan for 1997, adopted by Board of Directors February 5, 1997 (incorporated by reference herein to Exhibit 10.14 to Registrant's Form 10-K for year ended December 31, 1997).
10.5	1998 Management Stock Option Plan (incorporated by reference herein to Exhibit 10.17 to Registrant's Form 10-K for year ended December 31, 1997).
10.6	Employment Agreement between Registrant and Frank P. Bruno, dated as of December 1, 1997 (incorporated by reference herein to Exhibit 10.18 to Registrant's Form 10-K for the year ended December 31, 1998).
10.7	Letter Agreement between Registrant and Timothy W. Sullivan, dated August 8, 2000 (incorporated by reference herein to Exhibit 10.7 to Registrant's Form 10-Q, filed August 14, 2000).
10.8	Agreement of Debt Conversion between Registrant and Bucyrus Holdings, LLC, dated March 22, 2001 (incorporated by reference herein to Exhibit 10.21 to Registrant's Form 10-K for year ended December 31, 2000).
10.9	Agreement to Purchase and Sell Industrial Property between Registrant and InSite Real Estate Development, L.L.C., dated October 25, 2001 (incorporated by reference herein to Exhibit 10.18 to Registrant's Form 10-K for year ended December 31, 2001).
10.10	Industrial Lease Agreement between Registrant and InSite South Milwaukee, L.L.C., dated January 4, 2002 (incorporated by reference herein to Exhibit 10.19 to Registrant's Form 10-K for year ended December 31, 2001).
10.11	Termination Benefits Agreement between Registrant and John F. Bosbous, dated March 5, 2002 (incorporated by reference herein to Exhibit 10.20 to Registrant's Form 10-K for year ended December 31, 2001).
10.12	Termination Benefits Agreement between Registrant and Thomas B. Phillips, dated March 5, 2002 (incorporated by reference herein to Exhibit 10.21 to Registrant's Form 10-K for year ended December 31, 2001).
10.13	Loan and Security Agreement by and among Registrant, Minserco, Inc., Boonville Mining Services, Inc., GMAC Business Credit, LLC, and Bank One, Wisconsin, dated March 7, 2002 (incorporated by reference herein to Exhibit 10.22 to Registrant's Form 10-K for year ended December 31, 2001).

II-4

10.14	First Amendment, dated December 31, 2002, to Loan and Security Agreement (incorporated by reference herein to Exhibit 10.16(a) to Registrant's Form 10-K for year ended December 31, 2002).
10.15	Second Amendment, dated January 9, 2003, to Loan and Security Agreement (incorporated by reference herein to Exhibit 10.16(b) to Registrant's Form 10-K for year ended December 31, 2002).
10.16	Letter Agreement, as of December 31, 2002, to Loan and Security Agreement (incorporated by reference herein to Exhibit 10.16(c) to Registrant's Form 10-K for year ended December 31, 2002).
10.17	Third Amendment, dated November 13, 2003, to Loan and Security Agreement (incorporated by reference herein to Exhibit 10.10(d) to Registrant's Form 10-Q, filed November 13, 2003).
10.18	Fourth Amendment, dated March 8, 2004, to Loan and Security Agreement (incorporated by reference herein to Exhibit 10.28 to Registrant's Form 10-K for year ended December 31, 2003).
10.19	Board of Directors Resolution, dated December 16, 1998, amending the 1998 Management Stock Option Plan (incorporated by reference herein to Exhibit 10.17 to Registrant's Form 10-K for year ended December 31, 2002).
10.20	Form of Registration Rights Agreement.
21	Subsidiaries of Registrant.**
23.1	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
23.2	Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5).*
24.1	Power of Attorney (included in the signature pages hereto).**

*

To be filed by amendment.

**

Previously filed.

(b)

Financial Statements Schedules.

Schedule II—Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2001, 2002 and 2003 appears on page F-44. All other schedules have been omitted because the information required to be set forth therein is not applicable or is shown on the financial statements or notes, thereto.

ITEM 17. UNDERTAKINGS.

        The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

        Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other

II-5

than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

        The undersigned registrant hereby undertakes that:

(1)

For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(l) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.



(2)

For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-6

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of South Milwaukee, State of Wisconsin, on July 6, 2004.

BUCYRUS INTERNATIONAL, INC.
By:	/s/  TIMOTHY W. SULLIVAN Name: Timothy W. Sullivan Title: President, Chief Executive           Officer and Director

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/  TIMOTHY W. SULLIVAN Timothy W. Sullivan	President, Chief Executive Officer and Director	July 6, 2004
* Craig R. Mackus	Chief Financial Officer, Controller and Secretary	July 6, 2004
* Theodore C. Rogers	Chairman of the Board of Directors and Director	July 6, 2004
* W. Richard Bingham	Director	July 6, 2004
* Dino M. Cusumano	Director	July 6, 2004
* Kim A. Marvin	Director	July 6, 2004
* Robert L. Purdum	Director	July 6, 2004
* Gene E. Little	Director	July 6, 2004

* Robert W. Korthals	Director	July 6, 2004
* Ronald A. Crutcher	Director	July 6, 2004

*By:	/s/  TIMOTHY W. SULLIVAN
	Name:	Timothy W. Sullivan Attorney-in-fact

EXHIBIT INDEX

Exhibit No.	Description
1	Form of Underwriting Agreement.*
2.1	Agreement and Plan of Merger, dated August 21, 1997, between Registrant, American Industrial Partners Acquisition Company, LLC and Bucyrus Acquisition Corp. (incorporated by reference herein to Exhibit 1 to Registrant's Schedule 14D-9, filed August 26, 1997).
2.2	Certificate of Merger, dated September 26, 1997, and filed with the Secretary of State of the State of Delaware on September 26, 1997 (incorporated by reference herein to Exhibit 2.2 to Registrant's Form 8-K, filed on October 10, 1997).
2.3	Second Amended Joint Plan of Reorganization of B-E Holdings, Inc. and Bucyrus- Erie Company under Chapter 11 of the Bankruptcy Code, as modified December 1, 1994, including Exhibits (incorporated by reference herein to Exhibit 2.1 to Registrant's Form 8-K, filed December 13, 1994).
2.4	Order, dated December 1, 1994, of the U.S. Bankruptcy Court, Eastern District of Wisconsin, confirming the Second Amended Joint Plan of Reorganization of B-E Holdings, Inc. and Bucyrus-Erie Company under Chapter 11 of the Bankruptcy Code, as modified December 1, 1994, including Exhibits (incorporated by reference herein to Exhibit 2.2 to Registrant's Form 8-K, filed December 13, 1994).
3.1	Restated Certificate of Incorporation (incorporated by reference herein to Exhibit 3.6 to Registrant's Form 10-K for the year ended December 31, 1998).
3.2	Certificate of Amendment to Restated Certificate of Incorporation.**
3.3	Bylaws.**
3.4	Form of Amended and Restated Certificate of Incorporation.
3.5	Form of Amended and Restated Bylaws.
4.1	Specimen Class A common stock certificate.*
4.2	Indenture, dated as of September 24, 1997, among Registrant, Boonville Mining Services, Inc., Minserco, Inc. and Von's Welding, Inc. and Harris Trust and Savings Bank, Trustee (incorporated by reference herein to Exhibit 4.1 to Registrant's Form S-4 (Commission file No. 333-39359), filed November 3, 1997).
4.3	Letter, dated February 15, 2000, evidencing change of Indenture Trustee (incorporated by reference herein Exhibit 4.1(a) to Registrant's Form S-4 (Commission file No. 333-39359), filed November 3, 1997).
4.4	Form of Guarantee of Boonville Mining Services, Inc., Minserco, Inc. and Von's Welding, Inc., dated as of September 24, 1997, in favor of Harris Trust and Savings Bank as Trustee under the Indenture (incorporated by reference herein to Exhibit 4.1 to Registrant's Form S-4 (Commission file No. 333-39359), filed November 3, 1997).
4.5	Form of Registrant's 9-3/4% Senior Note due 2007 (incorporated by reference herein to Exhibit 4.1 to Registrant's Form S-4 (Commission file No. 333-39359), filed November 3, 1997).
5	Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.*

10.1	Stockholders Agreement, dated as of March 17, 1998, among Registrant, American Industrial Partners Acquisition Company, LLC and each individual who executes a counterpart thereto (incorporated by reference herein to Exhibit 10.11 to Registrant's Form 10-K for the year ended December 31, 2003).
10.2	Management Services Agreement by and among Registrant, Boonville Mining Services, Inc., Minserco, Inc. and Von's Welding, Inc. and American Industrial Partners (incorporated by reference herein to Exhibit 10.2 to Registrant's Form S-4 (Commission file No. 333-39359), filed November 3, 1997).
10.3	Employment Agreement between Registrant and Craig R. Mackus, dated as of May 21, 1997 (incorporated by reference herein to Exhibit 10.17 to Registrant's Form 10-Q, filed August 14, 1997).
10.4	Annual Management Incentive Plan for 1997, adopted by Board of Directors February 5, 1997 (incorporated by reference herein to Exhibit 10.14 to Registrant's Form 10-K for year ended December 31, 1997).
10.5	1998 Management Stock Option Plan (incorporated by reference herein to Exhibit 10.17 to Registrant's Form 10-K for year ended December 31, 1997).
10.6	Employment Agreement between Registrant and Frank P. Bruno, dated as of December 1, 1997 (incorporated by reference herein to Exhibit 10.18 to Registrant's Form 10-K for the year ended December 31, 1998).
10.7	Letter Agreement between Registrant and Timothy W. Sullivan, dated August 8, 2000 (incorporated by reference herein to Exhibit 10.7 to Registrant's Form 10-Q, filed August 14, 2000).
10.8	Agreement of Debt Conversion between Registrant and Bucyrus Holdings, LLC, dated March 22, 2001 (incorporated by reference herein to Exhibit 10.21 to Registrant's Form 10-K for year ended December 31, 2000).
10.9	Agreement to Purchase and Sell Industrial Property between Registrant and InSite Real Estate Development, L.L.C., dated October 25, 2001 (incorporated by reference herein to Exhibit 10.18 to Registrant's Form 10-K for year ended December 31, 2001).
10.10	Industrial Lease Agreement between Registrant and InSite South Milwaukee, L.L.C., dated January 4, 2002 (incorporated by reference herein to Exhibit 10.19 to Registrant's Form 10-K for year ended December 31, 2001).
10.11	Termination Benefits Agreement between Registrant and John F. Bosbous, dated March 5, 2002 (incorporated by reference herein to Exhibit 10.20 to Registrant's Form 10-K for year ended December 31, 2001).
10.12	Termination Benefits Agreement between Registrant and Thomas B. Phillips, dated March 5, 2002 (incorporated by reference herein to Exhibit 10.21 to Registrant's Form 10-K for year ended December 31, 2001).
10.13	Loan and Security Agreement by and among Registrant, Minserco, Inc., Boonville Mining Services, Inc., GMAC Business Credit, LLC, and Bank One, Wisconsin, dated March 7, 2002 (incorporated by reference herein to Exhibit 10.22 to Registrant's Form 10-K for year ended December 31, 2001).
10.14	First Amendment, dated December 31, 2002, to Loan and Security Agreement (incorporated by reference herein to Exhibit 10.16(a) to Registrant's Form 10-K for year ended December 31, 2002).

10.15	Second Amendment, dated January 9, 2003, to Loan and Security Agreement (incorporated by reference herein to Exhibit 10.16(b) to Registrant's Form 10-K for year ended December 31, 2002).
10.16	Letter Agreement, as of December 31, 2002, to Loan and Security Agreement (incorporated by reference herein to Exhibit 10.16(c) to Registrant's Form 10-K for year ended December 31, 2002).
10.17	Third Amendment, dated November 13, 2003, to Loan and Security Agreement (incorporated by reference herein to Exhibit 10.10(d) to Registrant's Form 10-Q, filed November 13, 2003).
10.18	Fourth Amendment, dated March 8, 2004, to Loan and Security Agreement (incorporated by reference herein to Exhibit 10.28 to Registrant's Form 10-K for year ended December 31, 2003).
10.19	Board of Directors Resolution, dated December 16, 1998, amending the 1998 Management Stock Option Plan (incorporated by reference herein to Exhibit 10.17 to Registrant's Form 10-K for year ended December 31, 2002).
10.20	Form of Registration Rights Agreement.
21	Subsidiaries of Registrant.**
23.1	Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
23.2	Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5).*
24.1	Power of Attorney (included in the signature pages hereto).**

*

To be filed by amendment.

**

Previously filed.

(b)

Financial Statements Schedules.

None

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Front
SOURCES OF MARKET AND INDUSTRY DATA
PROSPECTUS SUMMARY
Our Company
Our Industry
Our Strengths
Our Strategy
Risks Relating to Our Business and this Offering
American Industrial Partners
The Offering
Recapitalization and Corporate Reorganization
Ownership Structure
Current
Pro Forma
Ownership
Summary Consolidated Financial Data
RISK FACTORS
FORWARD-LOOKING STATEMENTS
USE OF PROCEEDS
DIVIDEND POLICY
CAPITALIZATION
DILUTION
SELECTED CONSOLIDATED FINANCIAL DATA
UNAUDITED AS ADJUSTED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
Our Industry
MANAGEMENT
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PRINCIPAL AND SELLING STOCKHOLDERS
DESCRIPTION OF CAPITAL STOCK
Common Stock
SHARES ELIGIBLE FOR FUTURE SALE
DESCRIPTION OF INDEBTEDNESS
UNDERWRITING
VALIDITY OF CLASS A COMMON STOCK
EXPERTS
WHERE YOU CAN FIND MORE INFORMATION
INDEX TO FINANCIAL STATEMENTS
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in Thousands, Except Per Share Amounts)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (Dollars in Thousands, Except Per Share Amounts)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS QUARTER ENDED MARCH 31, 2003 (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS QUARTER ENDED MARCH 31, 2004 (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED BALANCE SHEET DECEMBER 31, 2003 (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED BALANCE SHEET MARCH 31, 2004 (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS QUARTER ENDED MARCH 31, 2003 (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS QUARTER ENDED MARCH 31, 2004 (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in Thousands, Except Per Share Amounts)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in Thousands, Except Per Share Amounts)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' INVESTMENT (DEFICIT) (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2001 (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2002 (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2003 (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED BALANCE SHEET DECEMBER 31, 2002 (DOLLARS IN THOUSANDS)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED BALANCE SHEET December 31, 2003 (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2001 (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2002 (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATING CONDENSED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2003 (Dollars in Thousands)
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES FOR THE YEARS ENDED DECEMBER 31, 2001, 2002 AND 2003 (DOLLARS IN THOUSANDS)
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PART II INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

SIGNATURES
SIGNATURES
EXHIBIT INDEX

EX-3.4

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Exhibit 3.4

FORM OF AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

BUCYRUS INTERNATIONAL, INC.

Pursuant to Sections 228, 242 and 245 of the
Delaware General Corporation Law

        Bucyrus International, Inc. (the "Corporation"), a corporation organized and existing under the General Corporation Law of the State of Delaware (the "GCL"), does hereby certify as follows:

        (1)   The name of the Corporation is Bucyrus International, Inc. The Corporation was originally incorporated under the name Bucyrus-Erie Company. The original certificate of incorporation of the Corporation was filed with the office of the Secretary of State of the State of Delaware on November 3, 1927.

        (2)   This Amended and Restated Certificate of Incorporation was duly adopted by the Board of Directors of the Corporation (the "Board of Directors") and by the majority stockholder of the Corporation in accordance with Sections 228, 242 and 245 of the GCL.

        (3)   This Amended and Restated Certificate of Incorporation restates and integrates and further amends the restated certificate of incorporation of the Corporation, as heretofore amended or supplemented.

        (4)   Upon the filing (the "Effective Time") of this Amended and Restated Certificate of Incorporation pursuant to the GCL, each share of the Corporation's common stock, $0.01 par value per share, issued and outstanding immediately prior to the Effective Time (the "Old Common Stock") shall be reclassified as and changed into 616,000 shares of validly issued, fully paid, and non-assessable Class A Common Stock (as defined below) authorized by Article FOURTH of this Amended and Restated Certificate of Incorporation (totaling 41,000,000 shares of Class A Common Stock), and the certificates formerly representing outstanding shares of Old Common Stock shall thereafter be deemed to represent an equal number of shares of Class A Common Stock until such time as they are exchanged for new certificates representing an equal number of shares of Class A Common Stock.

        As promptly as practicable after the presentation and surrender, during usual business hours at the Company's headquarters or any office or agency of the Corporation designated for the registration and transfer of the Company's Common Stock, of any certificate representing shares of Old Common Stock, the Corporation shall issue and deliver at such office or agency, to or upon the written order of the holder thereof, a certificate for an equal number of shares of Class A Common Stock. The issuance of certificates for shares of Class A Common Stock so issuable upon the surrender of shares of Old Common Stock held by the registered holder thereof shall be made without charge to the converting holder for any tax imposed on the Corporation in respect to the issue thereof. The Corporation shall not, however, be required to pay any tax which may be payable with respect to any transfer involved in the issue and delivery of any certificate in a name other than that of the registered holder of the shares being surrendered, and the Corporation shall not be required to issue or deliver any such certificate unless and until the person requesting the issue thereof shall have paid to the Corporation the amount of such tax or has established to the satisfaction of the Corporation that such tax has been paid.

        (5)   The text of the certificate of incorporation is restated in its entirety as follows:

        FIRST: The name of the Corporation is Bucyrus International, Inc. (the "Corporation").

        SECOND: The address of the registered office of the Corporation in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at that address is The Corporation Trust Company.

        THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware (the "GCL").

        FOURTH: Authorized Capital Stock. The total number of shares of stock which the Corporation shall have authority to issue is 76,000,000 shares of capital stock, consisting of (i) 41,000,000 shares of class A common stock, par value $0.01 per share (the "Class A Common Stock"), (ii) 25,000,000 shares of class B common stock, par value $0.01 per share (the "Class B Common Stock" and, together with the Class A Common Stock, the "Common Stock"), and (iii) 10,000,000 shares of preferred stock, par value $0.01 per share (the "Preferred Stock").

        (a)   Common Stock. The powers, preferences and rights, and the qualifications, limitations and restrictions, of each class of the Common Stock are as follows:

        (i)    Ranking. Except as otherwise expressly provided in this Amended and Restated Certificate of Incorporation, the powers, preferences and rights of the holders of Class A Common Stock and holders of Class B Common Stock, and the qualifications, limitations and restrictions thereof, shall be in all respects identical.

        (ii)   Voting. Except as otherwise expressly required by law or provided in this Amended and Restated Certificate of Incorporation, and subject to any voting rights provided to holders of Preferred Stock at any time outstanding, the holders of any outstanding shares of Class A Common Stock and the holders of any outstanding shares of Class B Common Stock shall vote together as a single class on all matters with respect to which stockholders are entitled to vote under applicable law, this Amended and Restated Certificate of Incorporation or the Bylaws of the Corporation, or upon which a vote of stockholders is otherwise duly called for by the Corporation. At each annual or special meeting of stockholders, each holder of record of shares of Class A Common Stock on the relevant record date shall be entitled to cast one (1) vote in person or by proxy for each share of the Class A Common Stock standing in such holder's name on the stock transfer records of the Corporation, and each holder of record of shares of Class B Common Stock on the relevant record date shall be entitled to cast two (2) votes in person or by proxy for each share of Class B Common Stock standing in such holder's name on the stock transfer records of the Corporation.

        (iii)  No Cumulative Voting. Neither the holders of shares of Class A Common Stock nor the holders of shares of Class B Common Stock shall have cumulative voting rights.

        (iv)  Amendments Affecting Stock.

        (1)   So long as any shares of Class A Common Stock are outstanding, the Corporation shall not, without the affirmative vote of at least a majority (or such higher percentage, if any, as may then be required by applicable law) of the outstanding shares of Class A Common Stock voting as a single class, (x) amend, alter or repeal any provision of this Article FOURTH setting forth the terms of the Class A Common Stock so as to adversely affect the rights, preferences, qualifications, limitations or restrictions of the Class A Common Stock or (y) take any other action upon which the vote of the holders of outstanding shares of Class A Common Stock is required by law.

        (2)   So long as any shares of Class B Common Stock are outstanding, the Corporation shall not, without the affirmative vote of at least a majority (or such higher percentage, if any, as may then be required by applicable law) of the outstanding shares of Class B Common

2

Stock voting as a single class, (x) amend, alter or repeal any provision of this Article FOURTH setting forth the terms of the Class B Common Stock so as to adversely affect the rights, preferences, qualifications, limitations or restrictions of the Class B Common Stock or (y) take any other action upon which the vote of the holders of outstanding shares of Class A Common Stock is required by law.

        (v)   Dividends; Stock Splits. Subject to any rights provided to holders of Preferred Stock at any time outstanding, and subject to any other provisions of this Amended and Restated Certificate of Incorporation, as it may be amended from time to time, holders of shares of Class A Common Stock and shares of Class B Common Stock shall be entitled to receive such dividends and other distributions in cash, stock or property of the Corporation when, as and if declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor.

        (1)   If, at any time, a dividend or other distribution in cash or other property (other than dividends or other distributions payable in shares of Common Stock or other voting securities of the Corporation, or rights, options or warrants to purchase shares of Common Stock or other voting securities of the Corporation or securities convertible into or exchangeable for shares of Common Stock or other voting securities of the Corporation) is declared or paid on the shares of Class A Common Stock or shares of Class B Common Stock, a like dividend or other distribution in cash or other property shall also be declared or paid, on the shares of Class B Common Stock or shares of Class A Common Stock, as the case may be, in an equal amount per share.

        (2)   If, at any time, a dividend or other distribution payable in shares of Common Stock or other voting securities of the Corporation, or rights, options or warrants to purchase shares of Common Stock or other voting securities of the Corporation, or securities convertible into or exchangeable for shares of Common Stock or other voting securities of the Corporation ("Voting Securities") is paid or declared on shares of Class A Common Stock or Class B Common Stock, a like dividend or other distribution shall also be paid or declared, on the shares of Class B Common Stock or Class A Common Stock, as the case may be, in an equal amount per share, provided that the Voting Securities which shall be paid on the Class B Common Stock shall have two times the number of votes per share as the Voting Securities which shall be paid on the the Class A Common Stock; and provided, further that, for this purpose, if a dividend consisting of shares of Class A Common Stock or other voting securities of the Corporation, or rights, options or warrants to purchase shares of Class A Common Stock or other voting securities of the Corporation or securities convertible into or exchangeable for shares of Class A Common Stock or other voting securities of the Corporation is paid on shares of Class A Common Stock, and a dividend consisting of shares of Class B Common Stock or voting securities identical to the other voting securities paid on the shares of Class A Common Stock (except that the voting securities which shall be paid on the Class B Common Stock shall have two times the number of votes per share as the other voting securities to be received by the holders of the Class A Common Stock) or rights, options or warrants to purchase shares of Class B Common Stock or such other voting securities or securities convertible into or exchangeable for shares of Class B Common Stock or such other voting securities is paid on shares of Class B Common Stock, in an equal amount per share of Class A Common Stock and Class B Common Stock, such dividend or other distribution shall be deemed to be a like dividend or other distribution.

        (3)   The Corporation shall not have the power to issue shares of Class B Common Stock as a dividend or other distribution paid on shares of Class A Common Stock.

3

        (4)   In the case of any split, subdivision, combination or reclassification of shares of Class A Common Stock or Class B Common Stock, the shares of Class B Common Stock or Class A Common Stock, as the case may be, shall also be split, subdivided, combined or reclassified so that the respective numbers of shares of Class A Common Stock and Class B Common Stock outstanding immediately following such split, subdivision, combination or reclassification shall bear the same relationship to each other as did the respective numbers of shares of Class A Common Stock and Class B Common Stock outstanding immediately prior to such split, subdivision, combination or reclassification, such that the relative voting rights of the shares of Class A Common Stock and Class B Common Stock remain the same.

        (vi)  Liquidation, Dissolution, etc. In the event of any liquidation, dissolution or winding up (either voluntary or involuntary) of the Corporation, the holders of shares of Class A Common Stock and the holders of shares of Class B Common Stock shall be entitled to receive the assets and funds of the Corporation available for distribution after payments to creditors and to the holders of any Preferred Stock of the Corporation that may at the time be outstanding, in proportion to the number of shares held by them, respectively, without regard to class.

        (vii) Merger, etc. In the event of a merger or consolidation of the Corporation with or into another entity (whether or not the Corporation is the surviving entity), the holders of each share of Class A Common Stock and Class B Common Stock shall be entitled to receive the same consideration on a per share basis; provided that, if such consideration shall consist in any part of voting securities (or of options or warrants to purchase, or of securities convertible into or exchangeable for, voting securities), the holders of shares of Class B Common Stock shall receive, on a per share basis, voting securities with two times the number of votes per share as those voting securities to be received by the holders of shares of Class A Common Stock (or options or warrants to purchase, or securities convertible into or exchangeable for, voting securities with two times the number of votes per share as those voting securities issuable upon exercise of the options or warrants to be received by the holders of the shares of Class A Common Stock, or into which the convertible or exchangeable securities to be received by the holders of the shares of Class A Common Stock may be converted or exchanged).

        (viii) No Preemptive or Subscription Rights. No holder of shares of Class A Common Stock or Class B Common Stock shall be entitled to preemptive or subscription rights.

        (ix)  Rights of Class B Common Stock.

        (1)   The holder or holders of the Class B Common Stock shall have such voting powers as are set forth herein and as are required by the GCL.

        (2)   (A) The Class B Common Stock shall be beneficially owned only by Bucyrus Holdings, LLC ("Holdings") or AIP/BI LLC, each a limited liability company organized under the laws of the State of Delaware, and their respective Affiliates (as defined below) and their respective successors and any purported sale, pledge, transfer, assignment or disposition of shares of Class B Common Stock to any person or legal entity other than Holdings or AIP/BI LLC and their respective Affiliates and their respective successors shall result in the automatic conversion of such transferred shares of Class B Common Stock into an equal number of shares of Class A Common Stock, effective immediately upon any such purported sale, pledge, transfer, assignment or disposition of shares of Class B Common Stock, provided that a pledge of shares of Class B Common Stock, prior to default thereunder, which does not grant to the pledgee the power to vote or direct the vote of the pledged securities or the power to vote or direct the disposition of the pledged securities prior to a default, without any foreclosure or transfer of ownership shall not trigger the conversion of such Class B Common Stock.

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        (B)  Holdings and AIP/BI LLC and their respective Affiliates shall also have the right to voluntarily convert any portion of the shares of Class B Common Stock held by such party into an equal number of shares of Class A Common Stock at any time by submitting a notice of such election to the Corporation, setting forth the number of shares of Class B Common Stock to be so converted.

        (C)  In the event of any conversion of Class B Common Stock pursuant to this Article FOURTH, Section (a)(ix)(2), certificates formerly representing outstanding shares of Class B Common Stock will thereafter be deemed to represent an equal number of shares of Class A Common Stock until the certificates representing such Class B Shares are promptly exchanged for new certificates representing an equal number of Class A Shares, as contemplated by Article FOURTH, Section (a)(ix)(6) below. "Affiliate" of any person or legal enity (a "person") shall mean (a) any person which, directly or indirectly, is in control of, is controlled by, or is under common control with such person, or (b) any person who is a director, managing member, general partner or officer (i) of such person, (ii) of any subsidiary of such person or (iii) of any person described in clause (a) above. For purposes of this definition, control of a person shall mean the power, direct or indirect, (x) to vote 10% or more of the securities having ordinary voting power for the election of directors, managing members or general partners of such Person, or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

        (3)   Upon any conversion of shares of Class B Common Stock into shares of Class A Common Stock pursuant to Article FOURTH, Section (a)(ix)(2), no adjustment with respect to dividends shall be made; only those dividends shall be payable on the shares so converted as have been declared and are payable to holders of record of shares of Class B Common Stock as of a record date prior to the conversion date with respect to the shares so converted; and only those dividends shall be payable on shares of Class A Common Stock issued upon such conversion as have been declared and are payable to holders of record of shares of Class A Common Stock as of a record date on or after such conversion date.

        (4)   Shares of the Class B Common Stock converted into shares of Class A Common Stock pursuant to Article FOURTH, Section (a)(ix)(2) shall be retired and the Corporation shall not be authorized to reissue such shares of Class B Common Stock.

        (5)   Such number of shares of Class A Common Stock as may from time to time be required for issuance upon conversion of outstanding shares of Class B Common Stock pursuant to Article FOURTH, Section (a)(ix)(2) shall be at all times reserved for such purpose.

        (6)   As promptly as practicable after the presentation and surrender for conversion, during usual business hours at any office or agency of the Corporation, of any certificate representing shares (or fractions of shares) of Class B Common Stock that have been converted into shares of Class A Common Stock pursuant to Article FOURTH, Section (a)(ix)(2) hereof, the Corporation shall issue and deliver at such office or agency, to or upon the written order of the holder thereof, a certificate an equal number of shares of Class A Common Stock issuable upon such conversion. The issuance of certificates for shares of Class A Common Stock issuable upon the conversion of shares of Class B Common Stock held by the registered holder thereof shall be made without charge to the converting holder for any tax imposed on the Corporation in respect to the issue thereof. The Corporation shall not, however, be required to pay any tax which may be payable with respect to any transfer involved in the issue and delivery of any certificate in a name other than that of the registered holder of the shares being converted, and the Corporation shall not be required to issue or

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deliver any such certificate unless and until the person requesting the issue thereof shall have paid to the Corporation the amount of such tax or has established to the satisfaction of the Corporation that such tax has been paid.

        (b)   Preferred Stock. The Board of Directors is hereby expressly authorized to provide for the issuance of all or any shares of the Preferred Stock in one or more classes or series, and to fix for each such class or series such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such class or series and as may be permitted by the GCL, including, without limitation, the authority to provide that any such class or series may be (i) subject to redemption at such time or times and at such price or prices; (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or any other series; (iii) entitled to such rights upon the dissolution of, or upon any distribution of the assets of, the Corporation; or (iv) convertible into, or exchangeable for, shares of any other class or classes of stock, or of any other series of the same or any other class or classes of stock, of the Corporation at such price or prices or at such rates of exchange and with such adjustments; all as may be stated in such resolution or resolutions.

        (c)   Power to Sell and Purchase Shares. Subject to the requirements of applicable law, the Corporation shall have the power to issue and sell all or any part of any shares of any class of stock herein or hereafter authorized, other than shares of Class B Common Stock (except that the Corporation shall be permitted to issue additional shares of Class B Common Stock as expressly set forth in this Article FOURTH(a)(ix)(c) below) to such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not greater consideration could be received upon the issue or sale of the same number of shares of another class, and as otherwise permitted by law, provided that the Corporation shall have the power to issue shares of Class B Common Stock as dividends or distributions on outstanding shares of Class B Common Stock as set forth in Article FOURTH Section(a)(v) hereof. Subject to the requirements of applicable law, the Corporation shall have the power to purchase any shares of any class of stock herein or hereafter authorized from such persons, and for such consideration, as the Board of Directors shall from time to time, in its discretion, determine, whether or not less consideration could be paid upon the purchase of the same number of shares of another class, and as otherwise permitted by law. Shares of the Class B Common Stock purchased by the Company pursuant to this Article FOURTH, Section (c) shall convert into shares of Class A Common Stock and the Corporation shall only be authorized to reissue such shares as Class A Common Stock.

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        FIFTH: Bylaws. Bylaws for the Corporation may be adopted, amended, altered or repealed in accordance with the procedures set forth in the Bylaws.

        SIXTH: The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:

        (a)   The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

        (b)   The directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The initial division of the Board of Directors into classes shall be made by the decision of the affirmative vote of a majority of the entire Board of Directors. The term of the initial Class I directors shall terminate on the date of the 2005 annual meeting; the term of the initial Class II directors shall terminate on the date of the 2006 annual meeting; and the term of the initial Class III directors shall terminate on the date of the 2007 annual meeting. At each succeeding annual meeting of stockholders beginning in 2005, successors to the class of directors whose term expires at that annual meeting shall be elected for a three-year term. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director.

        (c)   A director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor shall be elected or designated by the Board under Article SIXTH Section (d) and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. Any director may resign at any time in accordance with the Bylaws.

        (d)   Subject to the terms of any one or more classes or series of Preferred Stock, any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, provided that a quorum is present, and any other vacancy occurring on the Board of Directors may be filled by a majority of the Board of Directors then in office, even if less than a quorum, or by a sole remaining director. Any director of any class elected to fill a vacancy resulting from an increase in the number of directors of such class shall hold office for a term that shall coincide with the remaining term of that class. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. Subject to the rights, if any, of the holders of shares of Preferred Stock then outstanding, any or all of the directors of the Corporation may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least a majority of the voting power of the Corporation's then outstanding capital stock entitled to vote generally in the election of directors or if such director was elected by vote of a separate class, by the affirmative vote of the holders of at least a majority of the voting power of such class of capital stock. Notwithstanding the foregoing, whenever the holders of any one or more classes or series of Preferred Stock issued by the Corporation shall have the right, voting separately by class or series, to elect directors at an annual or special meeting of stockholders, then upon commencement and for the duration of the period during which such right continues: (i) the then otherwise total authorized number of directors of the Corporation shall automatically be increased by such specified number of directors, and the holders of such Preferred Stock shall be entitled to elect the additional directors so provided for or fixed pursuant to said provisions, (ii) each such additional director shall serve until such director's

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successor shall have been duly elected and qualified, or until such director's right to hold such office terminates pursuant to said provisions, whichever occurs earlier, subject to his or her earlier death, disqualification, resignation or removal and (iii) any vacancies in such directorships shall be filled in accordance with the terms of the instrument designating such Preferred Stock and such directors will not be divided into classes unless expressly provided by the terms of such Preferred Stock. Except as otherwise provided by the Board in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate and the total and authorized number of directors of the Corporation shall be reduced accordingly.

        (e)   In addition to the powers and authority hereinbefore or by statute expressly conferred upon them, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of the GCL, this Amended and Restated Certificate of Incorporation, and any Bylaws adopted by the stockholders; provided, however, that no Bylaws hereafter adopted by the stockholders shall invalidate any prior act of the directors which would have been valid if such Bylaws had not been adopted.

        SEVENTH: No director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent such exemption from liability or limitation thereof is not permitted under the GCL as the same exists or may hereafter be amended. If the GCL is amended hereafter to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent authorized by the GCL, as so amended. Any repeal or modification of this Article SEVENTH shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification with respect to acts or omissions occurring prior to such repeal or modification.

        EIGHTH: Indemnification. The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by law, as now or hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the Corporation and shall inure to the benefit of his or her heirs, executors and personal and legal representatives; provided, however, that, except for proceedings to enforce rights to indemnification, the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors. The right to indemnification conferred by this Article EIGHTH shall include the right to be paid by the Corporation the expenses incurred in defending or otherwise participating in any proceeding in advance of its final disposition.

        The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article EIGHTH to directors and officers of the Corporation.

        The rights to indemnification and to the advance of expenses conferred in this Article EIGHTH shall not be exclusive of any other right which any person may have or hereafter acquire under this Amended and Restated Certificate of Incorporation, the Bylaws of the Corporation, any statute, agreement, vote of stockholders or disinterested directors or otherwise.

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        Any repeal or modification of this Article EIGHTH shall not adversely affect any rights to indemnification and to the advancement of expenses of a director or officer (or, if applicable, employee or agent) of the Corporation existing at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.

        The terms applicable to indemnification shall be as set forth above and in the Bylaws of the Corporation from time to time.

        NINTH: Stockholder Meetings.

        (a)   Action by Consent In Lieu of a Meeting. The holders of the Class B Common Stock shall have the right to act by written consent in accordance with the procedures set forth in the Bylaws of the Corporation. Except as otherwise set forth above, the ability of stockholders to consent in writing is hereby specifically denied and any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders.

        (b)   Special Meetings. Except as required by law and subject to the rights of the holders of any class or series of stock having a preference over the Common Stock as to the payment of dividends or distributions upon liquidation which may be designated in the certificate of designations or other instrument setting the rights and preferences of such security, special meetings of stockholders of the Corporation of any class or series for any purpose or purposes may only be called by (i) the Chairman, if there be one, (ii) the President, or (iii) the Secretary and shall be called by any such officer at the request in writing of (i) the Board of Directors, (ii) a committee of the Board of Directors that has been duly designated by the Board of Directors and whose powers and authority include the power to call such meetings pursuant to a resolution stating the purpose or purposes thereof approved by a majority of the directors then in office, or (iii) upon the written request of the holders of a majority of the Class B Common Stock filed with the Secretary of the Corporation. Such request shall state the purpose or purposes of the proposed meeting. At a Special Meeting of Stockholders, only such business shall be conducted as shall be specified in the notice of meeting (or any supplement thereto). Except as otherwise set forth above, the ability of stockholders to call a special meeting of stockholders is hereby specifically denied.

        (c)   Stockholder Nomination of Director Candidates and Other Stockholder Proposals. Advance notice of stockholder nominations for the election of directors and of the proposal by stockholders of any other action to be taken by the stockholders shall be given in such manner as shall be provided in the Bylaws of the Corporation.

        TENTH: Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. The books of the Corporation may be kept (subject to any provision contained in the GCL) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws of the Corporation.

        ELEVENTH: In furtherance and not in limitation of the powers conferred upon it by the laws of the State of Delaware, the Board of Directors shall have the power to adopt, amend, alter or repeal the Corporation's Bylaws. The affirmative vote of at least a majority of the entire Board of Directors shall be required to adopt, amend, alter or repeal the Corporation's Bylaws. The Corporation's Bylaws also may be adopted, amended, altered or repealed by the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the shares entitled to vote at an election of directors.

        TWELFTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation in the manner now or hereafter prescribed in this Amended and Restated Certificate of Incorporation, the Corporation's Bylaws or the GCL, and all rights herein conferred upon stockholders are granted subject to such reservation;

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provided, however, that, notwithstanding any other provision of this Amended and Restated Certificate of Incorporation (and in addition to any other vote that may be required by law), the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the shares entitled to vote at an election of directors shall be required to amend, alter, change or repeal, or to adopt any provision as part of this Amended and Restated Certificate of Incorporation inconsistent with the purpose and intent of, Articles SIXTH, NINTH and ELEVENTH of this Amended and Restated Certificate of Incorporation or this Article TWELFTH.

        IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be executed on its behalf this          day of July, 2004.

BUCYRUS INTERNATIONAL, INC.

By:

Name:

Title:

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FORM OF AMENDED AND RESTATED CERTIFICATE OF INCORPORATION BUCYRUS INTERNATIONAL, INC.

EX-3.5

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EXHIBIT 3.5

FORM OF AMENDED AND RESTATED
BYLAWS

OF

BUCYRUS INTERNATIONAL, INC.

A Delaware Corporation

Effective July    , 2004

TABLE OF CONTENTS

		Page
ARTICLE I OFFICES
Section 1.	Registered Office	1
Section 2.	Other Offices	1
ARTICLE II MEETINGS OF STOCKHOLDERS
Section 1.	Place of Meetings	1
Section 2.	Annual Meetings	1
Section 3.	Nature of Business at Meetings of Stockholders	1
Section 4.	Nomination of Directors	2
Section 5.	Special Meetings	3
Section 6.	Notice	3
Section 7.	Adjournments	3
Section 8.	Quorum	3
Section 9.	Voting	3
Section 10.	Proxies	4
Section 11.	Consent of Stockholders in Lieu of Meeting	4
Section 12.	List of Stockholders Entitled to Vote	5
Section 13.	Record Date	5
Section 14.	Stock Ledger	6
Section 15.	Conduct of Meetings	6
Section 16.	Inspectors of Election	6
ARTICLE III DIRECTORS
Section 1.	Number and Election of Directors	7
Section 2.	Vacancies	7
Section 3.	Duties and Powers	7
Section 4.	Meetings	7
Section 5.	Organization	7
Section 6.	Resignations and Removals of Directors	8
Section 7.	Quorum	8

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Section 8.	Actions of the Board by Written Consent	8
Section 9.	Meetings by Means of Conference Telephone	8
Section 10.	Committees	8
Section 11.	Compensation	8
Section 12.	Interested Directors	9
ARTICLE IV OFFICERS
Section 1.	General	10
Section 2.	Election	10
Section 3.	Voting Securities Owned by the Corporation	10
Section 4.	Chairman of the Board of Directors	10
Section 5.	President	10
Section 6.	Chief Operating Officer	11
Section 7.	Chief Financial Officer	11
Section 8.	Vice Presidents	11
Section 9.	Secretary	11
Section 10.	Treasurer	12
Section 11.	Assistant Secretaries	12
Section 12.	Assistant Treasurers	12
Section 13.	Other Officers	12
ARTICLE V STOCK
Section 1.	Form of Certificates	12
Section 2.	Signatures	13
Section 3.	Lost Certificates	13
Section 4.	Transfers	13
Section 5.	Dividend Record Date	13
Section 6.	Record Owners	13
Section 7.	Transfer and Registry Agents	13
ARTICLE VI NOTICES
Section 1.	Notices	14

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Section 2.	Waivers of Notice	14
ARTICLE VII GENERAL PROVISIONS
Section 1.	Dividends	14
Section 2.	Disbursements	14
Section 3.	Fiscal Year	14
Section 4.	Corporate Seal	14
ARTICLE VIII INDEMNIFICATION
Section 1.	Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation	15
Section 2.	Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation	15
Section 3.	Authorization of Indemnification	15
Section 4.	Good Faith Defined	16
Section 5.	Indemnification by a Court	16
Section 6.	Expenses Payable in Advance	16
Section 7.	Nonexclusivity of Indemnification and Advancement of Expenses	16
Section 8.	Insurance	17
Section 9.	Certain Definitions	17
Section 10.	Survival of Indemnification and Advancement of Expenses	17
Section 11.	Limitation on Indemnification	17
Section 12.	Indemnification of Employees and Agents	17
ARTICLE IX AMENDMENTS
Section 1.	Amendments	17
Section 2.	Entire Board of Directors	18

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BYLAWS

OF

BUCYRUS INTERNATIONAL, INC.

(hereinafter called the "Corporation")

ARTICLE I

OFFICES

        Section 1.    Registered Office.    The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware.

        Section 2.    Other Offices.    The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine.

ARTICLE II

MEETINGS OF STOCKHOLDERS

        Section 1.    Place of Meetings.    Meetings of the stockholders for the election of directors or for any other purpose shall be held at such time and place, either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors.

        Section 2.    Annual Meetings.    The Annual Meeting of Stockholders for the election of directors shall be held on such date and at such time as shall be designated from time to time by the Board of Directors. Any other proper business may be transacted at the Annual Meeting of Stockholders.

        Section 3.    Nature of Business at Meetings of Stockholders.    No business may be transacted at an Annual Meeting of Stockholders, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the Annual Meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof), or (c) otherwise properly brought before the Annual Meeting by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 3 and on the record date for the determination of stockholders entitled to notice of and to vote at such Annual Meeting and (ii) who complies with the notice procedures set forth in this Section 3.

        In addition to any other applicable requirements, for business to be properly brought before an Annual Meeting by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation.

        To be timely, a stockholder's notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the anniversary date of the immediately preceding Annual Meeting of Stockholders; provided, however, that in the event that the Annual Meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs.

        To be in proper written form, a stockholder's notice to the Secretary must set forth as to each matter such stockholder proposes to bring before the Annual Meeting (i) a brief description of the business desired to be brought before the Annual Meeting and the reasons for conducting such business at the Annual Meeting, (ii) the name and record address of such stockholder, (iii) the class or

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series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder, (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business and (v) a representation that such stockholder intends to appear in person or by proxy at the Annual Meeting to bring such business before the meeting.

        No business shall be conducted at the Annual Meeting of Stockholders except business brought before the Annual Meeting in accordance with the procedures set forth in this Section 3; provided, however, that, once business has been properly brought before the Annual Meeting in accordance with such procedures, nothing in this Section 3 shall be deemed to preclude discussion by any stockholder of any such business. If the chairman of an Annual Meeting determines that business was not properly brought before the Annual Meeting in accordance with the foregoing procedures, the chairman shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.

        Section 4.    Nomination of Directors.    Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may be otherwise provided in the Certificate of Incorporation with respect to the right of holders of preferred stock of the Corporation to nominate and elect a specified number of directors in certain circumstances. Nominations of persons for election to the Board of Directors may be made at any Annual Meeting of Stockholders, or at any Special Meeting of Stockholders called for the purpose of electing directors, (a) by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 4 and on the record date for the determination of stockholders entitled to notice of and to vote at such meeting and (ii) who complies with the notice procedures set forth in this Section 4.

        In addition to any other applicable requirements, for a nomination to be made by a stockholder, such stockholder must have given timely notice thereof in proper written form to the Secretary of the Corporation.

        To be timely, a stockholder's notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Corporation (a) in the case of an Annual Meeting, not less than ninety (90) days nor more than one hundred twenty (120) days prior to the anniversary date of the immediately preceding Annual Meeting of Stockholders; provided, however, that in the event that the Annual Meeting is called for a date that is not within thirty (30) days before or after such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the Annual Meeting was mailed or such public disclosure of the date of the Annual Meeting was made, whichever first occurs; and (b) in the case of a Special Meeting of Stockholders called for the purpose of electing directors, not later than the close of business on the tenth (10th) day following the day on which notice of the date of the Special Meeting was mailed or public disclosure of the date of the Special Meeting was made, whichever first occurs.

        To be in proper written form, a stockholder's notice to the Secretary must set forth (a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by the person and (iv) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated

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thereunder; and (b) as to the stockholder giving the notice (i) the name and record address of such stockholder, (ii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.

        No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 4. If the Chairman of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the Chairman shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

        Section 5.    Special Meetings.    Unless otherwise required by law or by the certificate of incorporation of the Corporation, as amended and restated from time to time (the "Certificate of Incorporation"), Special Meetings of Stockholders may be called only in accordance with the provisions of the Certificate of Incorporation.

        Section 6.    Notice.    Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, and, in the case of a Special Meeting, the purpose or purposes for which the meeting is called. Unless otherwise required by law, written notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to notice of and to vote at such meeting.

        Section 7.    Adjournments.    Any meeting of the stockholders may be adjourned from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting in accordance with the requirements of Section 4 hereof shall be given to each stockholder of record entitled to notice of and to vote at the meeting.

        Section 8.    Quorum.    Unless otherwise required by applicable law or the Certificate of Incorporation, the holders of a majority of the Corporation's capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. A quorum, once established, shall not be broken by the withdrawal of enough votes to leave less than a quorum. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, in the manner provided in Section 7 hereof, until a quorum shall be present or represented.

        Section 9.    Voting.    Unless otherwise required by law, the Certificate of Incorporation or these Bylaws, any question brought before any meeting of the stockholders, other than the election of directors, shall be decided by the vote of the holders of a majority of the total number of votes of the Corporation's capital stock represented and entitled to vote thereat, voting as a single class. Unless otherwise provided in the Certificate of Incorporation, and subject to Section 13(a) of this Article II,

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each stockholder represented at a meeting of the stockholders shall be entitled to cast one (1) vote for each share of capital stock entitled to vote thereat held by such stockholder, provided that for so long as any shares of Class B Common Stock are outstanding, each holder of Class B Common Stock will be entitled to cast two (2) votes for each share of Class B Common Stock entitled to vote thereat held by such holder. Such votes may be cast in person or by proxy as provided in Section 10 of this Article II. The Board of Directors, in its discretion, or the officer of the Corporation presiding at a meeting of the stockholders, in such officer's discretion, may require that any votes cast at such meeting shall be cast by written ballot.

        Section 10.    Proxies.    Each stockholder entitled to vote at a meeting of the stockholders may authorize another person or persons to act for such stockholder as proxy, but no such proxy shall be voted upon after three years from its date, unless such proxy provides for a longer period. Without limiting the manner in which a stockholder may authorize another person or persons to act for such stockholder as proxy, the following shall constitute a valid means by which a stockholder may grant such authority:

          (i)  A stockholder may execute a writing authorizing another person or persons to act for such stockholder as proxy. Execution may be accomplished by the stockholder or such stockholder's authorized officer, director, employee or agent signing such writing or causing such person's signature to be affixed to such writing by any reasonable means, including, but not limited to, by facsimile signature.

         (ii)  A stockholder may authorize another person or persons to act for such stockholder as proxy by transmitting or authorizing the transmission of a telegram, cablegram or other means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such telegram, cablegram or other means of electronic transmission, provided that any such telegram, cablegram or other means of electronic transmission must either set forth or be submitted with information from which it can be determined that the telegram, cablegram or other means of electronic transmission was authorized by the stockholder. If it is determined that such telegrams, cablegrams or other means of electronic transmission are valid, the inspectors or, if there are no inspectors, such other persons making that determination shall specify the information on which they relied.

        Any copy, facsimile telecommunication or other reliable reproduction of the writing, telegram, cablegram or other means of electronic transmission authorizing another person or persons to act as proxy for a stockholder may be substituted or used in lieu of the original writing, telegram, cablegram or other means of electronic transmission for any and all purposes for which the original writing, telegram, cablegram or other means of electronic transmission could be used; provided, however, that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing, telegram, cablegram or other means of electronic transmission.

        Section 11.    Consent of Stockholders in Lieu of Meeting.    Subject to the limitations set forth in Article NINTH Section (a) of the Certificate of Incorporation, any action required or permitted to be taken at any Annual or Special Meeting of Stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. Every written consent shall bear the date of

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signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered in the manner required by this Section 11 to the Corporation, written consents signed by a sufficient number of holders to take action are delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation as provided above in this Section 11.

        Section 12.    List of Stockholders Entitled to Vote.    The officer of the Corporation who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting (i) either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held or (ii) during ordinary business hours, at the principal place of business of the Corporation. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

        Section 13.    Record Date.

        (a)   In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of the stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of the stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of the stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

        (b)   In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of the stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return

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receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

        Section 14.    Stock Ledger.    The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by Section 12 of this Article II or the books of the Corporation, or to vote in person or by proxy at any meeting of the stockholders.

        Section 15.    Conduct of Meetings.    The Board of Directors of the Corporation may adopt by resolution such rules and regulations for the conduct of any meeting of the stockholders as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the chairman of any meeting of the stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) the determination of when the polls shall open and close for any given matter to be voted on at the meeting; (iii) rules and procedures for maintaining order at the meeting and the safety of those present; (iv) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the chairman of the meeting shall determine; (v) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (vi) limitations on the time allotted to questions or comments by participants.

        Section 16.    Inspectors of Election.    In advance of any meeting of the stockholders, the Board of Directors, by resolution, the Chairman or the President shall appoint one or more inspectors to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of the stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by applicable law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector's ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by applicable law.

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ARTICLE III

DIRECTORS

        Section 1.    Number and Election of Directors.    The Board of Directors shall consist of nine members or such number as is fixed from time to time by the Board of Directors. Except as provided in Section 2 of this Article III, directors shall be elected to fill the board seats of directors whose terms expire at each Annual Meeting of Stockholders by a plurality of the votes cast at such meeting. Directors need not be stockholders.

        The directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. The initial division of the Board of Directors into classes shall be made by the decision of the affirmative vote of a majority of the entire Board of Directors. The term of the initial Class I directors shall terminate on the date of the 2005 Annual Meeting; the term of the initial Class II directors shall terminate on the date of the 2006 Annual Meeting; and the term of the initial Class III directors shall terminate on the date of the 2007 Annual Meeting or, in each case, upon such director's earlier death, resignation or removal. At each succeeding Annual Meeting of Stockholders beginning in 2005, successors to the class of directors whose term expires at that Annual Meeting shall be elected for a three-year term and until their successors are duly elected and qualified. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class or from the removal from office, death, disability, resignation or disqualification of a director or other cause shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors have the effect of removing or shortening the term of any incumbent director.

        Section 2.    Vacancies.    Any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, provided that a quorum is present, and any other vacancy occurring on the Board of Directors may be filled by a majority of the Board of Directors then in office, even if less than a quorum, or by a sole remaining director. Any director of any class elected to fill a vacancy resulting from an increase in the number of directors of such class shall hold office for a term that shall coincide with the remaining term of that class. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his or her predecessor.

        Section 3.    Duties and Powers.    The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these Bylaws required to be exercised or done by the stockholders.

        Section 4.    Meetings.    The Board of Directors may hold meetings, both regular and special, either within or without the State of Delaware. Regular meetings of the Board of Directors may be held without notice at such time and at such place as may from time to time be determined by the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman, if there be one, the President, or by the majority of the directors then in office. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone or telegram on twenty-four (24) hours' notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances.

        Section 5.    Organization.    At each meeting of the Board of Directors, the Chairman of the Board of Directors, or, in his or her absence, a director chosen by a majority of the directors present, shall act

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as chairman. The Secretary of the Corporation shall act as secretary at each meeting of the Board of Directors. In case the Secretary shall be absent from any meeting of the Board of Directors, an Assistant Secretary shall perform the duties of secretary at such meeting; and in the absence from any such meeting of the Secretary and all the Assistant Secretaries, the chairman of the meeting may appoint any person to act as secretary of the meeting.

        Section 6.    Resignations and Removals of Directors.    Any director of the Corporation may resign at any time, by giving notice in writing to the Chairman of the Board of Directors, the President or the Secretary of the Corporation. Such resignation shall take effect at the time therein specified or, if no time is specified, immediately; and, unless otherwise specified in such notice, the acceptance of such resignation shall not be necessary to make it effective. Except as otherwise required by applicable law and subject to the rights, if any, of the holders of shares of preferred stock then outstanding, any director or the entire Board of Directors may be removed from office at any time, but only for cause, and only by the affirmative vote of the holders of at least a majority in voting power of the issued and outstanding capital stock of the Corporation entitled to vote in the election of directors.

        Section 7.    Quorum.    Except as otherwise required by law or the Certificate of Incorporation, at all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting of the time and place of the adjourned meeting, until a quorum shall be present.

        Section 8.    Actions of the Board by Written Consent.    Unless otherwise provided in the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all the members of the Board of Directors or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

        Section 9.    Meetings by Means of Conference Telephone.    Unless otherwise provided in the Certificate of Incorporation or these Bylaws, members of the Board of Directors of the Corporation, or any committee thereof, may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 9 shall constitute presence in person at such meeting.

        Section 10.    Committees.    The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent permitted by law and provided in the resolution establishing such committee, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each committee shall keep regular minutes and report to the Board of Directors when required.

        Section 11.    Compensation.    The directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors and may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary for service as director, payable in cash or securities. No such

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payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for service as committee members.

        Section 12.    Interested Directors.    No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because any such director's or officer's vote is counted for such purpose if: (i) the material facts as to the director's or officer's relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board of Directors or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (ii) the material facts as to the director's or officer's relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (iii) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified by the Board of Directors, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction.

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ARTICLE IV

OFFICERS

        Section 1.    General.    The officers of the Corporation shall be chosen by the Board of Directors and shall be a President, a Chief Operating Officer, a Chief Financial Officer a Secretary and a Treasurer. The Board of Directors, in its discretion, also may choose a Chairman of the Board of Directors (who must be a director) and one or more Vice Presidents, Assistant Secretaries, Assistant Treasurers and other officers. Any number of offices may be held by the same person, unless otherwise prohibited by law, the Certificate of Incorporation or these Bylaws. The officers of the Corporation need not be stockholders of the Corporation nor, except in the case of the Chairman of the Board of Directors, need such officers be directors of the Corporation.

        Section 2.    Election.    The Board of Directors, at its first meeting held after each Annual Meeting of Stockholders (or action by written consent of stockholders in lieu of the Annual Meeting of Stockholders if permitted under the Certificate of Incorporation), shall elect the officers of the Corporation who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors; and each officer of the Corporation shall hold office until such officer's successor is elected and qualified, or until such officer's earlier death, resignation or removal. Any officer elected by the Board of Directors may be removed at any time by the Board of Directors. Any vacancy occurring in any office of the Corporation shall be filled by the Board of Directors. The salaries of all officers of the Corporation shall be fixed by the Board of Directors.

        Section 3.    Voting Securities Owned by the Corporation.    Powers of attorney, proxies, waivers of notice of meeting, consents and other instruments relating to securities owned by the Corporation may be executed in the name of and on behalf of the Corporation by any one of the President, the Chief Operating Officer or the Chief Financial Officer or any other officer, authorized to do so by the Board of Directors and any such officer may, in the name of and on behalf of the Corporation, take all such action as any such officer may deem advisable to vote in person or by proxy at any meeting of security holders of any corporation in which the Corporation may own securities and at any such meeting shall possess and may exercise any and all rights and power incident to the ownership of such securities and which, as the owner thereof, the Corporation might have exercised and possessed if present. The Board of Directors may, by resolution, from time to time confer like powers upon any other person or persons.

        Section 4.    Chairman of the Board of Directors.    The Chairman of the Board of Directors, if there be one, shall preside at all meetings of the stockholders and of the Board of Directors. The Chairman of the Board of Directors shall be the Chief Executive Officer of the Corporation, unless the Board of Directors designates the President as the Chief Executive Officer, and, except where by law the signature of the President is required, the Chairman of the Board of Directors shall possess the same power as the President to sign all contracts, certificates and other instruments of the Corporation which may be authorized by the Board of Directors. During the absence or disability of the President, the Chairman of the Board of Directors shall exercise all the powers and discharge all the duties of the President. The Chairman of the Board of Directors shall also perform such other duties and may exercise such other powers as may from time to time be assigned by these Bylaws or by the Board of Directors.

        Section 5.    President.    The President shall, subject to the control of the Board of Directors and, if there be one, the Chairman of the Board of Directors, have general supervision of the business of the Corporation and shall see that all orders and resolutions of the Board of Directors are carried into effect. The President shall execute all bonds, mortgages, contracts and other instruments of the Corporation requiring a seal, under the seal of the Corporation, except where required or permitted by

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law to be otherwise signed and executed and except that the other officers of the Corporation may sign and execute documents when so authorized by these Bylaws, the Board of Directors or the President. In the absence or disability of the Chairman of the Board of Directors, or if there be none, the President shall preside at all meetings of the stockholders and, provided the President is also a director, the Board of Directors. If there be no Chairman of the Board of Directors, or if the Board of Directors shall otherwise designate, the President shall be the Chief Executive Officer of the Corporation. The President shall also perform such other duties and may exercise such other powers as may from time to time be assigned to such officer by these Bylaws or by the Board of Directors.

        Section 6.    Chief Operating Officer.    At the request of the President or in the President's absence or in the event of the President's inability or refusal to act (and if there be no Chairman of the Board of Directors), the Chief Operating Officer shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Chief Operating Officer shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe. If there be no Chairman of the Board of Directors and no Chief Operating Officer, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.

        Section 7.    Chief Financial Officer.    At the request of the President or in the President's absence or in the event of the President's inability or refusal to act (and if there be no Chairman of the Board of Directors or Chief Operating Officer), the Chief Financial Officer shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. The Chief Financial Officer shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe. If there be no Chairman of the Board of Directors and no Chief Financial Officer, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.

        Section 8.    Vice Presidents.    At the request of the President or in the President's absence or in the event of the President's inability or refusal to act (and if there be no Chairman of the Board of Directors, Chief Operating Officer or Chief Financial Officer), the Vice President, or the Vice Presidents if there are more than one (in the order designated by the Board of Directors), shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall perform such other duties and have such other powers as the Board of Directors from time to time may prescribe. If there be no Chairman of the Board of Directors and no Vice President, the Board of Directors shall designate the officer of the Corporation who, in the absence of the President or in the event of the inability or refusal of the President to act, shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President.

        Section 9.    Secretary.    The Secretary shall attend all meetings of the Board of Directors and all meetings of the stockholders and record all the proceedings thereat in a book or books to be kept for that purpose; the Secretary shall also perform like duties for committees of the Board of Directors when required. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors, the Chairman of the Board of Directors or the President, under whose supervision the Secretary shall be. If the Secretary shall be unable or shall refuse to cause to be given notice of all meetings of the stockholders and special meetings of the Board of Directors, and if there be no Assistant Secretary, then either the Board of Directors or the President may choose another officer to cause such notice to be given. The Secretary shall have custody of the seal of the

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Corporation and the Secretary or any Assistant Secretary, if there be one, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by the signature of the Secretary or by the signature of any such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest to the affixing by such officer's signature. The Secretary shall see that all books, reports, statements, certificates and other documents and records required by law to be kept or filed are properly kept or filed, as the case may be.

        Section 10.    Treasurer.    The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all transactions as Treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of the Treasurer and for the restoration to the Corporation, in case of the Treasurer's death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Treasurer's possession or under the Treasurer's control belonging to the Corporation.

        Section 11.    Assistant Secretaries.    Assistant Secretaries, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Secretary, and in the absence of the Secretary or in the event of the Secretary's inability or refusal to act, shall perform the duties of the Secretary, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Secretary.

        Section 12.    Assistant Treasurers.    Assistant Treasurers, if there be any, shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors, the President, any Vice President, if there be one, or the Treasurer, and in the absence of the Treasurer or in the event of the Treasurer's inability or refusal to act, shall perform the duties of the Treasurer, and when so acting, shall have all the powers of and be subject to all the restrictions upon the Treasurer. If required by the Board of Directors, an Assistant Treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of Assistant Treasurer and for the restoration to the Corporation, in case of the Assistant Treasurer's death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in the Assistant Treasurer's possession or under the Assistant Treasurer's control belonging to the Corporation.

        Section 13.    Other Officers.    Such other officers as the Board of Directors may choose shall perform such duties and have such powers as from time to time may be assigned to them by the Board of Directors. The Board of Directors may delegate to any other officer of the Corporation the power to choose such other officers and to prescribe their respective duties and powers.

ARTICLE V

STOCK

        Section 1.    Form of Certificates.    Every holder of stock in the Corporation shall be entitled to have a certificate signed by, or in the name of the Corporation (i) by the Chairman of the Board of Directors, the President, the Chief Operating Officer, the Chief Financial Officer or a Vice President

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and (ii) by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by such stockholder in the Corporation.

        Section 2.    Signatures.    Any or all of the signatures on a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

        Section 3.    Lost Certificates.    The Board of Directors may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or such owner's legal representative, to advertise the same in such manner as the Board of Directors shall require and/or to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate or the issuance of such new certificate.

        Section 4.    Transfers.    Stock of the Corporation shall be transferable in the manner prescribed by applicable law and in these Bylaws. Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by such person's attorney lawfully constituted in writing and upon the surrender of the certificate therefor, properly endorsed for transfer and payment of all necessary transfer taxes; provided, however, that such surrender and endorsement or payment of taxes shall not be required in any case in which the officers of the Corporation shall determine to waive such requirement. Every certificate exchanged, returned or surrendered to the Corporation shall be marked "Cancelled," with the date of cancellation, by the Secretary or Assistant Secretary of the Corporation or the transfer agent thereof. No transfer of stock shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.

        Section 5.    Dividend Record Date.    In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

        Section 6.    Record Owners.    The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise required by law.

        Section 7.    Transfer and Registry Agents.    The Corporation may from time to time maintain one or more transfer offices or agencies and registry offices or agencies at such place or places as may be determined from time to time by the Board of Directors.

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ARTICLE VI

NOTICES

        Section 1.    Notices.    Whenever written notice is required by law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee or stockholder, such notice may be given by mail, addressed to such director, member of a committee or stockholder, at such person's address as it appears on the records of the Corporation, with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Written notice may also be given personally or by telegram, telex or cable.

        Section 2.    Waivers of Notice.    Whenever any notice is required by applicable law, the Certificate of Incorporation or these Bylaws, to be given to any director, member of a committee or stockholder, a waiver thereof in writing, signed by the person or persons entitled to notice, whether before or after the time stated therein, shall be deemed equivalent thereto. Attendance of a person at a meeting, present in person or represented by proxy, shall constitute a waiver of notice of such meeting, except where the person attends the meeting for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any Annual or Special Meeting of Stockholders or any regular or special meeting of the directors or members of a committee of directors need be specified in any written waiver of notice unless so required by law, the Certificate of Incorporation or these Bylaws.

ARTICLE VII

GENERAL PROVISIONS

        Section 1.    Dividends.    Dividends upon the capital stock of the Corporation, subject to the requirements of the General Corporation Law of the State of Delaware (the "DGCL") and the provisions of the Certificate of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting of the Board of Directors (or any action by written consent in lieu thereof in accordance with Section 8 of Article III hereof), and may be paid in cash, in property, or in shares of the Corporation's capital stock. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, deems proper as a reserve or reserves to meet contingencies, or for purchasing any of the shares of capital stock, warrants, rights, options, bonds, debentures, notes, scrip or other securities or evidences of indebtedness of the Corporation, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for any proper purpose, and the Board of Directors may modify or abolish any such reserve.

        Section 2.    Disbursements.    All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

        Section 3.    Fiscal Year.    The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

        Section 4.    Corporate Seal.    The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware". The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.

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ARTICLE VIII

INDEMNIFICATION

        Section 1.    Power to Indemnify in Actions, Suits or Proceedings other than Those by or in the Right of the Corporation.    Subject to Section 3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person's conduct was unlawful.

        Section 2.    Power to Indemnify in Actions, Suits or Proceedings by or in the Right of the Corporation.    Subject to Section 3 of this Article VIII, the Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

        Section 3.    Authorization of Indemnification.    Any indemnification under this Article VIII (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the present or former director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Such determination shall be made, with respect to a person who is a director or officer at the time of such determination, (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (iv) by the stockholders. Such determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation. To the extent, however, that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit

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or proceeding described above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith, without the necessity of authorization in the specific case.

        Section 4.    Good Faith Defined.    For purposes of any determination under Section 3 of this Article VIII, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person's conduct was unlawful, if such person's action is based on the records or books of account of the Corporation or another enterprise, or on information supplied to such person by the officers of the Corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the Corporation or another enterprise or on information or records given or reports made to the Corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Corporation or another enterprise. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be.

        Section 5.    Indemnification by a Court.    Notwithstanding any contrary determination in the specific case under Section 3 of this Article VIII, and notwithstanding the absence of any determination thereunder, any director or officer may apply to the Court of Chancery of the State of Delaware or any other court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Section 1 or Section 2 of this Article VIII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director or officer is proper in the circumstances because such person has met the applicable standard of conduct set forth in Section 1 or Section 2 of this Article VIII, as the case may be. Neither a contrary determination in the specific case under Section 3 of this Article VIII nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director or officer seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 5 shall be given to the Corporation promptly upon the filing of such application. If successful, in whole or in part, the director or officer seeking indemnification shall also be entitled to be paid the expense of prosecuting such application.

        Section 6.    Expenses Payable in Advance.    Expenses (including attorneys' fees) incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay such amount if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation as authorized in this Article VIII. Such expenses (including attorneys' fees) incurred by former directors and officers or other employees and agents may be so paid upon such terms and conditions, if any, as the Corporation deems appropriate.

        Section 7.    Nonexclusivity of Indemnification and Advancement of Expenses.    The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Certificate of Incorporation, these Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office, it being the policy of the Corporation that indemnification of the persons specified in Section 1 and Section 2 of this Article VIII shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any person who is not specified in Section 1 or Section 2 of this Article VIII but whom the Corporation has the power or obligation to indemnify under the provisions of the DGCL, or otherwise.

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        Section 8.    Insurance.    The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was a director or officer of the Corporation serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against such person and incurred by such person in any such capacity, or arising out of such person's status as such, whether or not the Corporation would have the power or the obligation to indemnify such person against such liability under the provisions of this Article VIII.

        Section 9.    Certain Definitions.    For purposes of this Article VIII, references to "the Corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors or officers, so that any person who is or was a director or officer of such constituent corporation, or is or was a director or officer of such constituent corporation serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. The term "another enterprise" as used in this Article VIII shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the Corporation as a director, officer, employee or agent. For purposes of this Article VIII, references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the Corporation" shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the Corporation" as referred to in this Article VIII.

        Section 10.    Survival of Indemnification and Advancement of Expenses.    The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such a person.

        Section 11.    Limitation on Indemnification.    Notwithstanding anything contained in this Article VIII to the contrary, except for proceedings to enforce rights to indemnification (which shall be governed by Section 5 of this Article VIII), the Corporation shall not be obligated to indemnify any director or officer (or his or her heirs, executors or personal or legal representatives) or advance expenses in connection with a proceeding (or part thereof) initiated by such person unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation.

        Section 12.    Indemnification of Employees and Agents.    The Corporation may, to the extent authorized from time to time by the Board of Directors, provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred in this Article VIII to directors and officers of the Corporation.

ARTICLE IX

AMENDMENTS

        Section 1.    Amendments.    These Bylaws may be altered, amended or repealed, in whole or in part, or new Bylaws may be adopted by the stockholders or by the Board of Directors; provided,

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however, that notice of such alteration, amendment, repeal or adoption of new Bylaws be contained in the notice of such meeting of the stockholders or Board of Directors, as the case may be. All such amendments must be approved either (i) by the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the capital stock issued and outstanding and entitled to vote thereon; or (ii) by the affirmative vote of a majority of the total number of directors then in office.

        Section 2.    Entire Board of Directors.    As used in these Bylaws generally, the term "entire Board of Directors" means the total number of directors which the Corporation would have if there were no vacancies.

* * *

Adopted as of:

Last Amended as of:

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FORM OF AMENDED AND RESTATED BYLAWS OF BUCYRUS INTERNATIONAL, INC.
TABLE OF CONTENTS
BYLAWS OF BUCYRUS INTERNATIONAL, INC. (hereinafter called the "Corporation") ARTICLE I
OFFICES
ARTICLE II MEETINGS OF STOCKHOLDERS
ARTICLE III DIRECTORS
ARTICLE IV OFFICERS
ARTICLE V STOCK
ARTICLE VI NOTICES
ARTICLE VII GENERAL PROVISIONS
ARTICLE VIII INDEMNIFICATION
ARTICLE IX AMENDMENTS

EX-10.20

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Exhibit 10.20

FORM OF REGISTRATION RIGHTS AGREEMENT

Dated as of July    , 2004

Among

BUCYRUS INTERNATIONAL, INC. AND

THE STOCKHOLDERS NAMED ON SCHEDULE A HERETO

REGISTRATION RIGHTS AGREEMENT

        This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is dated as of July    , 2004 among BUCYRUS INTERNATIONAL, INC., a Delaware corporation (the "Company"), AIP/BI LLC, LLC, a Delaware limited liability company ("AIP"), and each individual who executed a counterpart of the Original Agreement (as defined below), or who hereafter executes a counterpart of this Agreement and who is listed on Schedule A attached hereto as a Management Stockholder (the "Management Stockholders" and, together with AIP, the "Stockholders").

        WHEREAS, (i) the Company may, but is not obligated to, grant to a Management Stockholder, Options (as defined below) to purchase Common Stock pursuant to the 2004 Option Plan (as defined below) and the Company and (ii) the Company has previously granted options to purchase Common Stock to Management Stockholders pursuant to the 1998 Option Plan (as defined below);

        WHEREAS, the Company executed a Stockholders Agreement dated as of March 17, 1998 (the "Original Agreement") to which AIP and each of the individuals listed on the Schedule of Stockholders attached thereto was a party;

        WHEREAS, pursuant to Section 11 of the Original Agreement, such agreement may be amended and restated in any respect with the approval in writing of the Company, AIP and the holders of at least a majority of the then outstanding Management Shares (as defined below); and

        WHEREAS, the Company, AIP and the holders of at least a majority of the currently outstanding Management Shares have agreed to amend and restate the Original Agreement in its entirety in the form of this Agreement.

        NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and obligations set forth herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to amend and restate the Original Agreement in its entirety as follows:

        SECTION 1.    DEFINITIONS.    For purposes of this Agreement, the following terms have the indicated meanings:

"1998 Option Plan" means that certain Management Stock Option Plan adopted by the Board as of March 17, 1998, as the same may be amended or supplemented from time to time, and together with the 2004 Option Plan, the "Option Plans".

"2004 Option Plan" means that certain 2004 Equity Incentive Plan adopted by the Board as of June 30, 2004, as the same may be amended or supplemented from time to time.

"Affiliate" means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person, provided that no securityholder of the Company shall be deemed an Affiliate of any other securityholder solely by reason of any investment in the Company, and in the case of AIP shall include any member of AIP. For the purpose of this definition, the term " control" (including with correlative meanings, the terms "controlling," "controlled by" and "under common control with"), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise.

"AIP" shall have the meaning set forth in the Preamble.

"AIP Shares" means Stockholder Shares held by AIP, its Affiliates, and their respective transferees.

"Board" means the Company's Board of Directors.

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"Business Day" means any day other than a Saturday, Sunday or any other day on which banking institutions and trust companies in New York City (in the State of New York) are permitted or required by any applicable law to close.

"Common Stock" means the Company's Class A common stock par value $0.01 per share or Class B Common Stock par value $0.01 per share, as the context may require (AIP, its Affiliates, and each of their respective successors shall be the only holder of Class B common stock).

"Demand Registration" shall have the meaning set forth in Section 3(a) hereof.

"Management Shares" means Stockholder Shares held by the Management Stockholders.

"Management Stockholder" shall have the meaning set forth in the Preamble.

"Options" means options to purchase shares of Class A Common Stock granted by the Company pursuant to the Option Plans.

"Person" means any individual, corporation, partnership, firm, joint venture, association, limited liability company, joint-stock company, trust, unincorporated organization, governmental or regulatory body or other entity of whatever nature.

"Prospectus" means the Prospectus or Prospectuses included in any Registration Statement, as amended or supplemented by any Prospectus supplement with respect to the terms of the offering of any portion of the Stockholder Shares covered by such Registration Statement and by all other amendments and supplements to the Prospectus, including post-effective amendments and all material incorporated by reference in such Prospectus or Prospectuses.

"Registration Statement" means any registration statement of the Company which covers any of the Stockholder Shares pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all materials incorporated by reference in such Registration Statement.

"SEC" means the United States Securities and Exchange Commission.

"Securities Act" means the Securities Act of 1933, as amended.

"Stockholder" shall have the meaning set forth in the Preamble.

"Stockholder Shares" means (a) all shares of Common Stock acquired by the Stockholders, including all shares of Common Stock acquired pursuant to the exercise of Options, and (b) all shares of Common Stock or other securities issued or issuable directly or indirectly with respect to the securities referred to in clause (a) by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization. Stockholder Shares shall cease to be such when (i) they have been sold (a) pursuant to a registered public offering under the Securities Act, or (b) to the public pursuant to Rule 144 under the Securities Act, or any successor provision or (ii) are eligible for sale to the public under Rule 144(k).

"Subsidiary" means, with respect to any Person, any other Person of which at least a majority of the outstanding shares or other equity interests having ordinary voting power for the election of directors or other persons performing similar functions are owned, directly or indirectly, by such Person or one or more Subsidiaries of such Person.

"Vested Options" means Options that are exercisable by the holder thereof on the date of determination.

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        SECTION 2.    REQUIRED LEGEND.

        (a)   Stock Legend.    Any and all certificates now evidencing Stockholder Shares held by each Stockholder shall have endorsed upon them a legend substantially as follows:

"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND NEITHER THE SHARES NOR ANY INTEREST THEREIN MAY BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS, IF REQUESTED BY THE COMPANY, AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS PROVIDED PRIOR TO THE PROPOSED TRANSACTION STATING THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED."

Such certificates may also bear such other legends and shall be subject to such restrictions on transfer as may be necessary to comply with any stock option, voting agreement or restricted stock agreement and all applicable Federal and state securities laws and regulations.

        (b)   Opinion of Counsel.    With the exception of transfers among AIP and its Affiliates, no holder of Stockholder Shares may sell, transfer or dispose of any such stock other than pursuant to an effective Registration Statement under the Securities Act (or any successor provision) without first delivering to the Company, if the Company so requests, an opinion of counsel reasonably acceptable in form and substance to the Company that registration under the Securities Act is not required in connection with such transfer.

        SECTION 3.    REGISTRATION RIGHTS.

        (a)   Demand Registration.

          (i)  At any time after the date hereof, the holders of a majority of the then outstanding AIP Shares shall have the right to require the Company to effect up to three registrations of their Common Stock on Form S-1 under the Securities Act and, if available, unlimited registrations on Form S-2 or S-3 under the Securities Act (any such registration, a " Demand Registration"). Each such Demand Registration shall be for no less than 2,000,000 of the then outstanding AIP shares, provided that if there are less than 2,000,000 AIP Shares outstanding, AIP may request that the Company register all such shares, unless such shares can be sold under Rule 144. Upon receipt of any request for a Demand Registration, the Company shall give prompt written notice of such request to each Stockholder, and, subject to the provisions set forth below, shall include in such Demand Registration all Stockholder Shares with respect to which the Company has received written requests for inclusion therein within 10 days after the delivery of the Company's notice (including shares covered by Vested Options to the extent that the Company received appropriate assurances that such Options will be exercised prior to the effectiveness of such registration or such later time as the Company shall agree to). If in connection with such proposed Demand Registration the managing underwriter for such offering advises the Company that the number of Stockholder Shares requested to be included therein exceeds the number of Stockholder Shares that can be sold without adversely affecting the pricing or the marketability of such offering, then the shares of Common Stock to be included in such registration shall be allocated (i) first, to AIP for the AIP Shares requested to be registered, (ii) second, pro rata, to the other holders of Stockholder Shares for the number of such Stockholder Shares requested by each holder other than AIP to be registered and (iii) third, to other holders of Common Stock. The Company shall have the right to select the investment banker(s) and manager(s) to administer any Demand Registration that is an underwritten offering, subject to the approval of the holders of a majority of the AIP Shares to be included in such Demand Registration.

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         (ii)  Restrictions on Demand Registration.    The Company shall not be obligated to effect any Demand Registration within two months after the effective date of a previous Demand Registration. The Company may postpone for up to three months the filing or the effectiveness of, or withdraw a Registration Statement for a Demand Registration if, based on the good faith judgment of the Company's board of directors, such postponement or withdrawal is necessary in the best interest of the Company; provided, however, that in no event shall the Company withdraw a Registration Statement after such Registration Statement has been declared effective; and provided, further, however, that in any of the event of a delay or withdrawal under this Section 3(a)(ii), the holders of AIP Shares requesting such Demand Registration shall be entitled to withdraw such request and, if such request is withdrawn, such Demand Registration shall not count as one of the permitted Demand Registrations. The Company shall provide written notice to the Holders of Stockholder Shares requesting such Demand Registration of (x) any postponement or withdrawal of the filing or effectiveness of a Registration Statement pursuant to this paragraph (ii), (y) the Company's decision to file or seek effectiveness of such Registration Statement following such withdrawal or postponement and (z) the effectiveness of such Registration Statement.

        (iii)  Effective Period of Demand Registration.    After any Demand Registration filed on Form S-3 pursuant to this Agreement has become effective, the Company shall use its best efforts to keep such Demand Registration effective for a period equal to 180 days from the date on which the SEC declares such Demand Registration effective (or if such Demand Registration is not effective during any period within such 180 days, such 180-day period shall be extended by the number of days during such period when such Demand Registration is not effective). After any Demand Registration filed on another Form other than Form S-3 pursuant to this Agreement has become effective, the Company shall use its best efforts to keep such Demand Registration effective for such shorter period which shall terminate when all of the Stockholder Shares covered by such Demand Registration have been sold pursuant to such Demand Registration. If the Company shall withdraw any Demand Registration pursuant to subsection (a)(ii) of this Section 3 (a "Withdrawn Demand Registration"), the Holders of the Stockholder Shares remaining unsold and originally covered by such Withdrawn Demand Registration shall be entitled to a replacement Demand Registration which (subject to the provisions of this Section 3), (x) if on Form S-3 the Company shall use its best efforts to keep effective for a period commencing on the effective date of such Demand Registration and ending on the earlier to occur of the date (i) which is 180 days from the effective date of such Demand Registration and (ii) on which all of the Stockholder Shares covered by such Demand Registration has been sold and (y) if on another Form other than Form S-3, such shorter period which shall terminate when all of the Stockholder Shares covered by such Demand Registration have been sold pursuant to such Demand Registration. Such additional Demand Registration otherwise shall be subject to all of the provisions of this Agreement.

        (b)   Company Registration.    In the event that the Company proposes to register any Common Stock under the Securities Act in connection with a public offering (other than a Demand Registration) on any form (other than Form S-4 or Form S-8) that would legally permit the inclusion of Stockholder Shares, the Company shall give each of the Stockholders written notice thereof as soon as practicable but in no event less than 15 days prior to such registration, and shall include in such registration all Stockholder Shares with respect to which the Company has received written requests for inclusion therein within 10 days after delivery of the Company's notice (including shares covered by Vested Options to the extent that the Company receives appropriate assurances that such Options will be exercised prior to the effectiveness of such registration or such later time as the Company shall agree to), subject to the limitations set forth in this Section 3(b). If in connection with such proposed registration the managing underwriter for such

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offering advises the Company that the number of Stockholder Shares (or the number of Management Shares) requested to be included therein exceeds the number of Stockholder Shares (or the number of Management Shares) that can be sold without adversely affecting the pricing or the marketability of such offering, then the shares of Common Stock to be included in such Registration Statement shall be allocated (i) first, to AIP for the AIP Shares requested to be registered, (ii) second, pro rata, to the other holders of Stockholder Shares (assuming the exercise of all Vested Options held by all participating Stockholders) for the number of such Stockholder Shares requested by each holder other than AIP to be registered and (iii) third, to other holders of Common Stock.

        (c)   Costs of Registration.    The Company shall bear the costs of each registration pursuant to this Section 3, including the reasonable fees and expenses of one counsel for the selling Stockholders (to be selected by the holders of a majority of the Stockholder Shares to be included in such registration) but excluding any underwriting discounts or commissions on the sale of Stockholder Shares or the fees and expenses of any additional counsel retained by the Stockholders.

        (d)   Participation in Underwritten Registrations.    As a condition to the inclusion of Stockholder Shares in any registration, each participating Stockholder agrees (a) to sell such Stockholder's Stockholder Shares on the basis provided in any underwriting arrangements, including customary indemnification and holdback provisions and (b) to complete and execute all questionnaires, powers of attorney, indemnities, underwriting agreements in a form reasonably acceptable to the Company and the underwriter(s) and other documents required under the terms of such underwriting arrangements.

        (e)   Holdback Agreement.    Each holder of Stockholder Shares agrees that if requested in connection with an underwritten offering made pursuant to (i) Section 3(a) hereof or (ii) the Company's registration of Common Stock under the Securities Act (other than as contemplated by Section 3(a) hereof), by the managing underwriter or underwriters of such underwritten offering, such Stockholder will not effect any public sale or distribution of Common Stock or any securities convertible or exchangeable or exercisable for Common Stock, including a sale pursuant to Rule 144, Rule 144A or other exemption available from Securities Act registration (except as part of such underwritten offering), during the period beginning 10 days prior to, and ending 180 days after, the closing date of each underwritten offering made pursuant to such Registration Statement (or for such shorter period as to which the managing underwriter or underwriters may agree).

        SECTION 4.    REGISTRATION PROCEDURES.

        Whenever AIP requests that any AIP Shares be registered pursuant to this Agreement, the Company shall use its best efforts to effect the registration and the sale of such AIP Shares in accordance with the intended methods of disposition thereof, and pursuant thereto the Company shall as expeditiously as possible:

        (a)   prepare and file with the SEC a Registration Statement with respect to such AIP Shares (and any other Stockholder Shares to be registered pursuant to Section 3 hereof) and use its best efforts to cause such Registration Statement to become effective as soon as practicable thereafter; and before filing a Registration Statement or Prospectus or any amendments or supplements thereto, furnish to the Stockholders who own Common Stock covered by such Registration Statement (for purposes of this Section 4, the "Selling Stockholders") and the underwriter or underwriters, if any, copies of all such documents proposed to be filed, including documents incorporated by reference in the Prospectus and, if requested by such Selling Stockholders, the exhibits incorporated by reference, and such Selling Stockholders shall have the opportunity to object to any information pertaining to such Selling Stockholders that is contained therein and the Company will make the corrections reasonably requested by such Selling Stockholders with respect

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to such information prior to filing any Registration Statement or amendment thereto or any Prospectus or any supplement thereto;

        (b)   prepare and file with the SEC such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be necessary to keep such Registration Statement effective for a period of not less than 180 days if on Form S-3, or if on another Form for such period as is necessary to complete the distribution of the Stockholder Shares covered by such Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all Stockholder Shares covered by such Registration Statement during such period in accordance with the intended methods of disposition by the Selling Stockholders thereof set forth in such Registration Statement;

        (c)   furnish to each Selling Stockholder such number of copies of such Registration Statement, each amendment and supplement thereto, the Prospectus included in such Registration Statement (including each preliminary Prospectus) and such other documents as such Selling Stockholder may reasonably request in order to facilitate the disposition of the Stockholder Shares owned by such Selling Stockholder;

        (d)   use its best efforts to register or qualify such Stockholder Shares under such other securities or blue sky laws of such jurisdictions as any selling Stockholder reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such Selling Stockholder to consummate the disposition in such jurisdictions of the Stockholder Shares owned by such Selling Stockholder (provided, that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph (d), (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction);

        (e)   notify each Selling Stockholder, at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the occurrence of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, at the request of any such Selling Stockholder, the Company shall prepare a supplement or amendment to such Prospectus so that, as thereafter delivered to the purchasers of such Stockholder Shares, such Prospectus shall not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading;

        (f)    in the case of an underwritten offering, enter into such customary agreements (including underwriting agreements in customary form, which agreements may provide that the Company shall indemnify the underwriters thereof, their officers, directors and agents and each Person who controls such underwriters (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) to the same extent as provided in Section 5 with respect to the indemnification of the Stockholders) and take all such other actions as the holders of a majority of number of shares of the Stockholder Shares being sold or the underwriters reasonably request in order to expedite or facilitate the disposition of such Stockholder Shares (including, without limitation, effecting a stock split or a combination of shares and using its best efforts to cause members of management of the Company to participate on a reasonable basis in customary "road-show" activities to the extent required by the underwriters with a view to maximizing the price of the Common Stock sold in such offering) and cause to be delivered to the underwriters and the Selling Stockholders, if any, opinions of counsel to the Company in customary form, covering such matters as are customarily covered by opinions for an underwritten public offering as the underwriters may request and addressed to the underwriters and the Selling Stockholders;

        (g)   make available, for inspection by any Selling Stockholder, any underwriter participating in any disposition pursuant to such Registration Statement, and any attorney, accountant or other

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agent retained by any such Selling Stockholder or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company's officers, directors, employees and independent accountants to supply all information reasonably requested by any such Selling Stockholder, underwriter, attorney, accountant or agent in connection with such Registration Statement;

        (h)   use its best efforts to cause all such Stockholder Shares to be listed on each securities exchange on which securities of the same class issued by the Company are then listed or, if no such similar securities are then listed, on Nasdaq or a national securities exchange selected by the Company;

        (i)    provide a transfer agent and registrar for all such Stockholder Shares not later than the effective date of such Registration Statement;

        (j)    if requested, cause to be delivered, immediately prior to the effectiveness of the Registration Statement (and, in the case of an underwritten offering, at the time of delivery of any Stockholder Shares sold pursuant thereto), letters from the Company's independent certified public accountants addressed to each Selling Stockholder (unless such Selling Stockholder does not provide to such accountants the appropriate representation letter required by rules governing the accounting profession) and each underwriter, if any, stating that such accountants are independent public accountants within the meaning of the Securities Act and the applicable rules and regulations adopted by the SEC thereunder, and otherwise in customary form and covering such financial and accounting matters as are customarily covered by letters of the independent certified public accountants delivered in connection with primary or secondary underwritten public offerings, as the case may be;

        (k)   make generally available to its securityholders a consolidated earnings statement (which need not be audited) for the 12 months beginning after the effective date of a registration statement as soon as reasonably practicable after the end of such period, which earnings statement shall satisfy the requirements of an earning statement under Section 11(a) of the Securities Act;

        (l)    promptly notify each Selling Stockholder and the underwriter or underwriters, if any:

          (i)  when the Registration Statement, any pre-effective amendment, the Prospectus or any Prospectus supplement or post-effective amendment to the Registration Statement has been filed and, with respect to the Registration Statement or any post-effective amendment, when the same has become effective;

         (ii)  of any written request by the SEC for amendments or supplements to the Registration Statement or Prospectus;

        (iii)  of the notification to the Company by the SEC of its initiation of any proceeding with respect to the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement; and

        (iv)  of the receipt by the Company of any notification with respect to the suspension of the qualification of any Stockholder Shares for sale under the applicable securities or blue sky laws of any jurisdiction.

        At all times after the Company has filed a registration statement with the SEC pursuant to the requirements of either the Securities Act or the Exchange Act, the Company shall file all reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder, and take such further action as any Stockholders may reasonably request, all to the extent required to enable such Holders to be eligible to sell Stockholder Shares pursuant to Rule 144 (or any similar rule then in effect).

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        The Company may require each Selling Stockholder to the Company any other information regarding such Selling Stockholder and the distribution of such Stockholder Shares as the Company may from time to time reasonably request in writing.

        Each Stockholder agrees by having its Common Stock treated as Stockholder Shares hereunder that, upon notice of the happening of any event as a result of which the Prospectus included in such Registration Statement contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein not misleading, such selling Stockholder will forthwith discontinue disposition of its Stockholder Shares until such selling Stockholder is advised in writing by the Company that the use of the Prospectus may be resumed and is furnished with a supplemented or amended Prospectus, and, if so directed by the Company, such selling Stockholder will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such selling Stockholder "s possession, of the Prospectus covering such Stockholder Shares current at the time of receipt of such notice. If the Company shall give any notice to suspend the disposition of Stockholder Shares pursuant to a Prospectus, the Company shall extend the period of time during which the Company is required to maintain the Registration Statement effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such notice to and including the date such selling Stockholder either is advised by the Company that the use of the Prospectus may be resumed or receives the copies of the supplemented or amended Prospectus.

        SECTION 5.    INDEMNIFICATION.

        In connection with any underwritten offering which includes Stockholder Shares pursuant to this Agreement:

        (a)   The Company agrees to indemnify, to the fullest extent permitted by law, each Stockholder (for purposes of this Section 5, each a "Holder"), its officers, directors and affiliates and each Person who controls such Holder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses caused by any untrue or alleged untrue statement of material fact contained in any registration statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information relating to such Holder furnished in writing to the Company by such Holder expressly for use therein or (if applicable) by such Holder's failure to deliver a copy of the registration statement or Prospectus or any amendments or supplements thereto after the Company has furnished such Holder with a sufficient number of copies of the same.

        (b)   In connection with any registration statement in which a Holder is participating, each such Holder shall furnish to the Company in writing such information as the Company reasonably requests for use in connection with any such registration statement or Prospectus and, to the extent permitted by law, shall indemnify the Company, its directors and officers and each Person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue or alleged untrue statement of material fact contained in the registration statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information so furnished in writing by such Holder expressly for use in the Registration Statement; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders and the liability of each such Holder shall be in proportion to and limited to the net amount received by such Holder from the sale of Stockholder Shares pursuant to such Registration Statement.

        (c)   Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such

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indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld). An indemnifying party shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim. Failure to give prompt written notice shall not release the indemnifying party from its obligations hereunder.

        (d)   The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and shall survive the transfer of Stockholder Shares.

        (e)   If the indemnification provided for in or pursuant to this Section 5 is due in accordance with the terms hereof, but is held by a court to be unavailable or unenforceable in respect of any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions which result in such losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of the indemnifying party on the one hand and of the indemnified person on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party, and by such party's relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. In no event shall the liability of any selling Holder be greater in amount than the amount of net proceeds received by such Holder upon such sale or the amount for which such indemnifying party would have been obligated to pay by way of indemnification if the indemnification provided for under Section 5(a) or 5(b) hereof had been available under the circumstances.

        SECTION 6.    AMENDMENT AND WAIVER.    Except as otherwise provided herein, no amendment or waiver of any provision of this Agreement shall be effective against the Company or Stockholders unless such amendment or waiver is approved in writing by the party affected thereby.

        SECTION 7.    SEVERABILITY.    If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

        SECTION 8.    ENTIRE AGREEMENT.    Except as otherwise expressly set forth herein, this document embodies the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.

        SECTION 9.    SUCCESSORS AND ASSIGNS.    This Agreement shall bind and inure to the benefit of and be enforceable by and against (i) the Company and its successors and assigns (including any successor by merger or consolidation) and (ii) and the Stockholders and their respective permitted successors and assigns so long as such Stockholders and their respective permitted successors and assigns hold Stockholder Shares. The Company may assign any of its rights hereunder to AIP or any of its Affiliates.

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        SECTION 10.    COUNTERPARTS.    This Agreement may be executed in separate counterparts each of which shall be an original and all of which taken together shall constitute one and the same agreement.

        SECTION 11.    REMEDIES.    The Company and the Stockholders shall be entitled to enforce their rights under this Agreement specifically to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that the Company or any Stockholder may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief (without posting a bond or other security) in order to enforce or prevent any violation of the provisions of this Agreement.

        SECTION 12.    NOTICES.    Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, or mailed first class mail (postage prepaid) or sent by reputable overnight courier service (charges prepaid) to the Company at its address set forth below and to any other recipient at the address indicated on the schedules hereto and to any subsequent holder of Stockholder Shares subject to this Agreement at such address as indicated by the Company's records, or at such address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given to a party hereunder when actually received at the address of such party or, if delivered in person, when so delivered.

The Company's address is:	Bucyrus International, Inc. 1100 Milwaukee Avenue South Milwaukee, Wisconsin 53172 Attention: President
with a copy to:	American Industrial Partners One Maritime Plaza, Suite 2525 San Francisco, CA 94111 Attention: [                        ]

        SECTION 13.    GOVERNING LAW.    The corporate law of Delaware shall govern all issues concerning the relative rights of the Company and its stockholders. All other questions shall in all respects be governed by, and construed in accordance with, the laws of the State of New York.

        SECTION 14.    DESCRIPTIVE HEADINGS.    The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

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[Signatures follow]

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        IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first above written.

	BUCYRUS INTERNATIONAL, INC.
	By:	Name: Craig Mackus Title: Chief Financial Officer,          Controller and Secretary
BUCYRUS HOLDINGS, LLC
By:	AMERICAN INDUSTRIAL PARTNERS CAPITAL FUND II, L.P., its Managing Member
	By:	AMERICAN INDUSTRIAL PARTNERS II, L.P., its General Partner
		By:	AMERICAN INDUSTRIAL PARTNERS CORPORATION, its General Partner
			By:	Name: Title:
		HOLDERS OF MAJORITY OF MANAGEMENT SHARES
		Name:
		Title:
		Percent held:
		Name:
		Title:
		Percent held:

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SCHEDULE A
MANAGEMENT STOCKHOLDERS

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FORM OF REGISTRATION RIGHTS AGREEMENT Dated as of July , 2004 Among BUCYRUS INTERNATIONAL, INC. AND THE STOCKHOLDERS NAMED ON SCHEDULE A HERETO
REGISTRATION RIGHTS AGREEMENT
SCHEDULE A MANAGEMENT STOCKHOLDERS

EX-23.1

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Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        We consent to the use in this Amendment No. 3 to Registration Statement No. 333-114326 of Bucyrus International, Inc. of our report dated March 26, 2004 (June 9, 2004, as to the effects of the stock split described in Note A), relating to the consolidated financial statements of Bucyrus International, Inc. as of and for the years ended December 31, 2003 and 2002 (which report expresses an unqualified opinion and includes explanatory paragraphs referring to [1] the adoption on January 1, 2002, of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, and [2] the application of procedures relating to certain disclosures, adjustments and reclassifications of financial statement amounts related to the 2001 financial statements that were audited by other auditors who have ceased operations and for which we have expressed no opinion or other form of assurance other than with respect to such disclosures and reclassifications), appearing in the Prospectus, which is a part of this Registration Statement, and to the reference to us under the heading "Experts" in such Prospectus.

/s/ Deloitte & Touche LLP

Milwaukee, Wisconsin
June 29, 2004

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Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM