Joy Global 10-Q 2008 Q1 Quarterly report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
[ X ]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDEDFebruary 1, 2008
OR
[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD fromto
Commission File number 1-9299
	JOY GLOBAL INC.
	(Exact Name of Registrant as Specified in Its Charter)
Delaware			39-1566457
(State of Incorporation)			(I.R.S. Employer
			Identification No.)
	100 East Wisconsin Ave, Suite 2780
	Milwaukee, Wisconsin 53202
	(Address of principal executive offices)
	(Zip Code)
	(414) 319-8500
	(Registrant’s Telephone Number, Including Area Code)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-
accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b -2 of the
Exchange Act. LARGE ACCELERATED FILER [ X ] ACCELERATED FILER o NON-ACCELERATED FILER o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes [ ] No [ X ]
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest
practicable date.
Class		Outstanding at February 29, 2008
Common Stock, $1 par value		107,937,379 shares

JOY GLOBAL INC.

FORM 10-Q -- INDEX

February 1, 2008

PART I. – FINANCIAL INFORMATION		PAGE No.
Item 1 – Financial Statements (unaudited):
	Condensed Consolidated Statement of Income – Three Months
	Ended February 1, 2008 and January 26, 2007	4
	Condensed Consolidated Balance Sheet – February 1, 2008
	and October 26, 2007	5
	Condensed Consolidated Statement of Cash Flows – Three Months
	Ended February 1, 2008 and January 26, 2007	6
	Notes to Condensed Consolidated Financial Statements	7 – 22
Item 2 – Management’s Discussion and Analysis of Financial Condition and
	Results of Operations	23 – 27
Item 3 – Quantitative and Qualitative Disclosures About Market Risk		27
Item 4 – Controls and Procedures		28
PART II. – OTHER INFORMATION
Item 1 – Legal Proceedings		29
Item 1A – Risk Factors		29
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		29
Item 3 – Defaults Upon Senior Securities		30
Item 4 – Submission of Matters to a Vote of Security Holders		30
Item 5 – Other Information		30
Item 6 –Exhibits		30
Signatures		31

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Forward-Looking Statements

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements are identified by forward-looking terms such as “anticipate,” “believe,” “estimate,” “expect,” “indicate,” “may be,” “objective,” “plan,” “predict,” “will be,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially from the forward-looking statements. Important factors that could cause our actual results to differ materially from the results anticipated by the forward-looking statements include general economic and industry conditions in the markets in which we operate, risks associated with conducting business in foreign countries, and the risks discussed in Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for our fiscal year ended October 26, 2007, and in other filings that we, from time to time, make with the SEC. Any or all of these factors could cause our actual results and financial or legal status for future periods to differ materially from those expressed or referred to in any forward-looking statement. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

See accompanying notes to consolidated financial statements

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PART I. - FINANCIAL INFORMATION

Item 1. Financial Statements

JOY GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

(In thousands except per share amounts)

			Three Months Ended
			February 1,		January 26,
			2008		2007
Net sales		$	640,329	$	560,466
Costs and expenses:
	Cost of sales		428,430		385,599
	Product development, selling and administrative expenses		101,536		81,850
	Other income		(808)		(965)
Operating income			111,171		93,982
Interest income			2,564		2,668
Interest expense			(6,814)		(7,110)
Reorganization items			(1,884)		(150)
Income from continuing operations before income taxes			105,037		89,390
Provision for income taxes			(35,126)		(29,725)
Income from continuing operations			69,911		59,665
Income from discontinued operations, net of taxes			1,141		-
Net income		$	71,052	$	59,665
Basic earnings per share:
	Income from continuing operations	$	0.65	$	0.52
	Income from discontinued operations		0.01		-
	Net income	$	0.66	$	0.52
Diluted earnings per share:
	Income from continuing operations	$	0.64	$	0.51
	Income from discontinued operations		0.01		-
	Net income	$	0.65	$	0.51
Dividends per share		$	0.15	$	0.15
Weighted average shares outstanding:
	Basic		107,827		114,679
	Diluted		108,975		116,049

See accompanying notes to consolidated financial statements

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JOY GLOBAL INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands)

				February 1,		October 26,
				2008		2007
				(Unaudited)
ASSETS
Current assets:
	Cash and cash equivalents		$	226,944	$	173,248
	Accounts receivable, net			552,601		560,242
	Inventories			800,440		727,360
	Other current assets			71,419		76,945
		Total current assets		1,651,404		1,537,795
Property, plant and equipment, net				237,619		234,029
Intangible assets, net				78,576		79,716
Deferred income taxes				236,244		248,139
Prepaid benefit cost				1,910		779
Other assets				30,492		34,445
		Total assets	$	2,236,245	$	2,134,903
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Short-term notes payable, including current portion
		of long-term obligations	$	224	$	240
	Trade accounts payable			183,213		199,198
	Employee compensation and benefits			54,031		59,490
	Advance payments and progress billings			427,133		324,102
	Accrued warranties			48,783		49,382
	Other accrued liabilities			107,647		121,127
		Total current liabilities		821,031		753,539
	Long-term obligations			396,142		396,257
	Accrued pension costs			174,870		173,559
	Other			90,079		87,554
		Total liabilities		1,482,122		1,410,909
Shareholders' equity				754,123		723,994
		Total liabilities and shareholders' equity	$	2,236,245	$	2,134,903

See accompanying notes to consolidated financial statements

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JOY GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(In thousands)

			Three Months Ended
			February 1,		January 26,
			2008		2007
Cash flows from operating activities:
Net income		$	71,052	$	59,665
Non-cash items:
	Income from discontinued operations		(1,141)		-
	Depreciation and amortization		12,222		12,214
	Amortization of financing fees and discounts		154		148
	Decrease in deferred income taxes		(1,520)		(80)
	Excess income tax benefit from exercise of stock options		(1,922)		(1,521)
	Change in long-term accrued pension costs		1,133		5,655
	Other, net		2,955		1,772
Changes in working capital items:
	Decrease in accounts receivable, net		6,687		3,194
	Increase in inventories		(83,937)		(38,800)
	Increase in other current assets		(5,943)		(2,423)
	Decrease in trade accounts payable		(14,946)		(43,050)
	Decrease in employee compensation and benefits		(4,902)		(34,044)
	Increase in advance payments and progress billings		105,007		6,229
	Increase in other accrued liabilities		914		12,057
Net cash provided (used) by operating activities			85,813		(18,984)
Cash flows from investing activities:
	Acquisition of business, net of cash acquired		-		(8,551)
	Property, plant and equipment acquired		(15,750)		(12,142)
	Proceeds from the sale of business		9,868		-
	Other, net		163		(52)
Net cash used by investing activities			(5,719)		(20,745)
Cash flows from financing activities:
	Exercise of stock options		3,770		3,572
	Excess income tax benefit from exercise of stock options		1,922		1,521
	Dividends paid		(16,123)		(17,313)
	Purchase of treasury stock		(11,911)		(359,704)
	Issuance of senior notes		-		394,874
	Financing fees		-		(976)
	Payments on long-term obligations, net		(81)		(14,093)
	Decrease in short-term notes payable		-		(1,486)
Net cash (used) provided by financing activities			(22,423)		6,395
Effect of exchange rate changes on cash and cash equivalents			(3,975)		2,179
Increase (Decrease) in Cash and Cash Equivalents			53,696		(31,155)
Cash and Cash Equivalents at Beginning of Period			173,248		101,254
Cash and Cash Equivalents at End of Period		$	226,944	$	70,099

See accompanying notes to consolidated financial statements

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JOY GLOBAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

February 1, 2008

(Unaudited)

1. Description of Business

Joy Global Inc. (the “Company”) is a leading manufacturer and servicer of high productivity mining equipment for the extraction of coal and other minerals and ores. Our equipment is used in major mining regions throughout the world to mine coal, copper, iron ore, oil sands and other minerals. We operate in two business segments: underground mining machinery (Joy Mining Machinery or “Joy”) and surface mining equipment (P&H Mining Equipment or “P&H”). Joy is a major manufacturer of underground mining equipment for the extraction of coal and other bedded minerals and offers comprehensive service locations near major mining regions worldwide. P&H is a major producer of surface mining equipment for the extraction of ores and minerals and provides extensive operational support for many types of equipment used in surface mining.

2. Basis of Presentation

The Condensed Consolidated Financial Statements presented in this quarterly report on Form 10-Q are unaudited and have been prepared by us in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and pursuant to the rules and regulations of the Securities and Exchange Commission. The preparation of the financial statements in conformity with GAAP for interim financial information requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual amounts could differ from the estimates.

In our opinion, all adjustments necessary for the fair presentation on a going concern basis of the results of operations, cash flows and financial position for all periods presented have been made. All adjustments made are of a normal recurring nature.

These financial statements should be read in conjunction with the financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended October 26, 2007. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

3. Borrowings and Credit Facilities

Direct borrowings and capital lease obligations consisted of the following:

		February 1,		October 26,
In thousands		2008		2007
6.0% Senior Notes due 2016	$	246,865	$	246,797
6.625% Senior Notes to 2036		148,359		148,355
Capital leases		1,142		1,345
		396,366		396,497
Less: Amounts due within one year		(224)		(240)
Long-term Obligations	$	396,142	$	396,257

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We have a $400.0 million unsecured revolving credit facility (“Credit Agreement”) which expires November 10, 2011. Outstanding borrowings bear interest equal to LIBOR plus the applicable margin (0.5% to 1.25%) or the Base Rate (defined as the higher of the Prime Rate or the Federal Funds Effective Rate plus 0.50%) at our option. We pay a commitment fee ranging from 0.125% to 0.25% on the unused portion of the revolving credit facility based on our credit rating. The Credit Agreement requires the maintenance of certain financial covenants including leverage and interest coverage. The Credit Agreement also restricts payments of dividends or other return of capital based on the consolidated leverage ratio. On February 1, 2008, we were in compliance with all financial covenants in the Credit Agreement and had no restriction on the payment of dividends or return of capital.

At February 1, 2008, no direct borrowings were outstanding under the Credit Agreement. Outstanding letters of credit issued under the Credit Agreement, which count toward the $400.0 million credit limit, totaled $118.0 million. At February 1, 2008, there was $282.0 million available for borrowings under the Credit Agreement.

See Note 17 – Subsequent Events for information related to the second amendment to the Credit Agreement.

4. Shareholders’ Equity

On November 20, 2007, our Board of Directors declared a cash dividend of $0.15 per outstanding share of common stock. The dividend was paid on December 19, 2007 to all stockholders of record at the close of business on December 5, 2007.

Under our share repurchase program, management is authorized to repurchase up to $1.0 billion in shares in the open market or through privately negotiated transactions until December 31, 2008. Through February 1, 2008, we have repurchased approximately $807.1 million of common stock, representing 17,445,212 shares, under the program, including approximately $11.9 million of common stock, representing 221,500 shares, during the quarter ended February 1, 2008.

Separate Statements of Shareholders’ Equity are not required to be presented for interim periods. However,

comprehensive income consisted of the following:

			Quarter Ended
			February 1,		January 26,
In thousands			2008		2007
Net income		$	71,052	$	59,665
Comprehensive income:
	Minimum pension liability adjustment		2,953		-
	Translation adjustments		(20,152)		10,013
	Derivative fair value adjustments		(2,885)		1,368
Total comprehensive income		$	50,968	$	71,046

5. Share Based Compensation

The total stock-based compensation expense we recognized for the quarter ended February 1, 2008 and January 26, 2007 was approximately $3.7 million and $2.3 million, respectively.

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Stock Options

A summary of stock option activity under all plans is as follows:

			Weighted-Average		Aggregate
	Number of		Exercise Price		Intrinsic Value
	Options		per Share		(In Millions)
Outstanding at October 26, 2007	2,160,463	$	25.20
Options granted	696,700		56.89
Options exercised	(197,513)		20.08
Options forfeited or cancelled	(12,860)		47.86
Outstanding at February 1, 2008	2,646,790	$	33.81	$	81.3
Exercisable at February 1, 2008	1,361,086	$	19.62	$	61.1

Restricted Stock Units

A summary of restricted stock unit activity under all plans is as follows:

			Weighted-Average
	Number of		Grant Date
	Units		Fair Value
Outstanding at October 26, 2007	400,759	$	21.92
Units granted	53,400		56.87
Units earned from dividends	1,101		59.27
Units settled	(50,094)		11.65
Units deferred	(3,082)		11.64
Outstanding at February 1, 2008	402,084	$	28.02

Performance Shares

A summary of performance share activity under all plans is as follows:

			Weighted-
			Average		Aggregate
	Number of		Grant Date		Intrinsic Value
	Shares		Fair Value		(In Millions)
Outstanding at October 26, 2007	268,345	$	32.42
Shares granted	105,400		56.87
Shares distributed	(97,464)		11.53	$	5.9
Shares deferred	(19,263)		11.53	$	1.2
Shares forfeited	(458)		56.87
Shares not yet vested at February 1, 2008	256,560	$	53.92

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6. Basic and Diluted Net Earnings Per Share

Basic net earnings per share is computed based on the weighted-average number of shares outstanding during each period. Diluted net earnings per share is computed based on the weighted-average number of ordinary shares during each period, plus dilutive potential shares considered outstanding during the period in accordance with SFAS No. 128, “Earnings per Share.”

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

			Quarter Ended
			February 1,		January 26,
In thousands except per share data			2008		2007
Numerator:
	Income from continuing operations	$	69,911	$	59,665
	Discontinued operations		1,141		-
	Net income	$	71,052	$	59,665
Denominator:
	Denominator for basic net income per share -
	Weighted average shares		107,827		114,679
	Effect of dilutive securities:
	Stock options, restricted stock units and
	performance shares		1,148		1,370
	Denominator for diluted net income per share -
	Adjusted weighted average shares and
	assumed conversions		108,975		116,049
Basic earnings per share
	Income from continuing operations	$	0.65	$	0.52
	Discontinued operations		0.01		-
	Net Income	$	0.66	$	0.52
Diluted earnings per share
	Income from continuing operations	$	0.64	$	0.51
	Discontinued operations		0.01		-
	Net Income	$	0.65	$	0.51

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7. Goodwill and Intangible Assets

Goodwill and intangible assets with indefinite useful lives are not amortized but are tested for impairment at least annually. Intangible assets with finite useful lives are amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

				February 1, 2008				October 26, 2007
		Weighted
		Average		Gross				Gross
		Amortization		Carrying		Accumulated		Carrying		Accumulated
In thousands		Period		Amount		Amortization		Amount		Amortization
Finite lived other intangible assets:
	Engineering Drawings	6 years	$	2,900	$	(725)	$	2,900	$	(604)
	Customer Relationships	20 years		31,000		(3,014)		31,000		(2,519)
	Backlog	1 year		5,990		(5,990)		5,990		(5,990)
	Non-Compete Agreements	5 years		5,300		(1,590)		5,300		(1,325)
	Patents	17 years		10,557		(5,036)		10,559		(4,886)
	Unpatented Technology	35 years		1,147		(149)		1,147		(140)
	Subtotal	16.0 years		56,894		(16,504)		56,896		(15,464)
Indefinite lived other intangible assets:
	Trademarks			21,500		-		21,500		-
	Pension			-		-		-		-
	Subtotal			21,500		-		21,500		-
Total other intangible assets			$	78,394	$	(16,504)	$	78,396	$	(15,464)

Changes in the carrying amount of goodwill for the quarter ended February 1, 2008, are as follows:

In thousands		Underground Mining Machinery		Surface Mining Equipment
Balance as of October 26, 2007	$	7,018	$	9,766
Goodwill acquired during the period		-		-
Acquisition finalization		-		-
Translation adjustments		-		(98)
Balance as of February 1, 2008	$	7,018	$	9,668

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Amortization expense was $1.0 million and $2.7 million for the quarter ended February 1, 2008 and January 26, 2007, respectively. Estimated future annual amortization expense is as follows:

In thousands
For the fiscal year ending:
	2008	$	4,014
	2009		3,825
	2010		3,766
	2011		3,443
	2012		2,473

8. Contingent Liabilities

We and our subsidiaries are involved in various unresolved legal matters that arise in the normal course of operations, the most prevalent of which relate to product liability (including asbestos-related and silicosis liability), employment and commercial matters. Also, as a normal part of their operations, our subsidiaries undertake contractual obligations, warranties and guarantees in connection with the sale of products or services. Although the outcome of these matters cannot be predicted with certainty and favorable or unfavorable resolutions may affect the results of operations on a quarter-to-quarter basis, we believe that the outcome of such legal and other matters will not have a materially adverse effect on our consolidated financial position, results of operations or liquidity.

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

We are currently in non-binding arbitration on retirement income matters in accordance with the memorandum of understanding within the 2004 contract agreement with the United Steelworkers of America (“Steelworkers”) at P&H Mining Equipment’s manufacturing facility in Milwaukee, Wisconsin. If a conclusion is not reached as part of the arbitration, expected in June 2008, the Steelworkers would be able to pursue a variety of options, one of which includes a work stoppage. Management is optimistic that this matter can be resolved without adverse impact on the business, but if not, we have plans to mitigate the significance of an unfavorable outcome.

In early 2008 we reached a three year agreement with union representation covering approximately 250 employees in Chile.

At February 1, 2008, we were contingently liable to banks, financial institutions and others for approximately $165.8 million for outstanding letters of credit, bank guarantees and surety bonds securing performance of sales contracts and other guarantees in the ordinary course of business. At February 1, 2008, there were $31.1 million of outstanding letters of credit or other guarantees issued by non-U.S. banks for non-U.S. subsidiaries.

We have entered into various forward foreign exchange contracts with major international financial institutions for the purpose of hedging our risk of loss associated with changes in foreign exchange rates. These contracts involve off-balance-sheet market and credit risk. As of February 1, 2008, the nominal or face value of forward foreign exchange contracts to which we are a party, in absolute U.S. dollar equivalent terms, was $491.0 million.

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

We are exposed to credit-related losses in the event of non-performance by counterparties to our forward exchange contracts, but we do not expect any counterparties to fail to meet their obligations. A contract is generally subject to credit risk only when it has a positive fair value and the maximum exposure is the amount of the positive fair value.

9. Inventories

Consolidated inventories consisted of the following:

		February 1,		October 26,
In thousands		2008		2007
Finished goods	$	544,465	$	508,045
Work in process and purchased parts		179,080		151,642
Raw materials		76,895		67,673
	$	800,440	$	727,360

10. Warranties

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

The following table reconciles the changes in the Company's product warranty reserve:

			Quarter Ended
			February 1,		January 26,
In thousands			2008		2007
Balance, beginning of period		$	49,382	$	38,929
	Accrual for warranty expensed during
	the period		6,508		5,941
	Settlements made during the period		(6,036)		(4,599)
	Change in liability for pre-existing warranties
	during the period, including expirations		127		95
	Effect of foreign currency translation		(1,198)		622
Balance, end of period		$	48,783	$	40,988

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11. Reorganization Items

Reorganization items include income, expense and loss that were realized or incurred as a result of our reorganization under Chapter 11 of the Bankruptcy Code. We emerged from Chapter 11 of the Bankruptcy Code on July 12, 2001. For the quarter ended February 1, 2008 and January 26, 2007, the $1.9 million expense related to a claim settlement of $1.4 million and post emergence professional fees of $0.5 million. For the quarter ended January 26, 2007, the $0.2 million of reorganization expense represented post emergence professional fees.

12. Retiree Benefits

The components of net periodic benefit costs recognized are as follows:

			Pension Benefits				Postretirement Benefits
			Quarter Ended				Quarter Ended
			February 1,		January 26,		February 1,		January 26,
In thousands			2008		2007		2008		2007
Service cost		$	5,283	$	5,773	$	160	$	129
Interest cost			21,606		20,014		811		853
Expected return on assets			(23,841)		(21,781)		(51)		-
Amortization of:
	Prior service cost		149		126		(41)		(49)
	Actuarial loss		2,720		5,689		141		111
Net periodic benefit cost		$	5,917	$	9,821	$	1,020	$	1,044

13. Income Taxes

As of October 27, 2007, we adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48 (“FIN 48”), Accounting for Uncertainty in Income Taxes. As a result of this adoption, we recorded an additional tax liability of approximately $0.2 million to shareholders’ equity. As of October 27, 2007, net unrecognized tax benefits of approximately $17.4 million were recorded with approximately $21.7 million recorded in Other Non-Current Liabilities and $4.3 million recorded in Other Non-Current Assets. If recognized, all of the net unrecognized tax liabilities and assets would affect the effective tax rate.

Interest and penalties associated with unrecognized tax benefits have been historically recorded as part of the provision for income tax in the Consolidated Statement of Income. As of October 27, 2007, total interest and penalties of approximately $1.8 million were recorded as part of unrecognized tax benefits on the Consolidated Balance Sheet.

With respect to tax years subject to examination by the domestic taxing authorities, all years prior to and including fiscal 1999 are closed by statute with all subsequent years open due to the loss carryforward from fiscal 2000 and fiscal 2003 for U.S. Federal purposes. Additionally, due to the existence of tax loss carryforwards, the same relative period exists for U.S. State purposes although, in some instances, earlier years also remain open. From a non-domestic perspective, the major locations in which we conduct business are as follows: United Kingdom – fiscal 2006 forward is open for examination; South Africa – fiscal 2004

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forward is open for examination; Australia – fiscal 1997 forward remains open due to tax loss carryforwards; and Canada – fiscal 2003 forward is open for examination. There are a number of smaller entities in other countries that generally have tax statutes of limitation ranging from 3 to 5 years.

14. Segment Information

At February 1, 2008, we had two reportable segments: Underground Mining Machinery and Surface Mining Equipment. Operating income (loss) of the segments does not include interest income (expense) or provision for income taxes. There are no significant intersegment sales. There has not been a material change in segment total assets from October 26, 2007.

		Quarter Ended
		February 1,		October 26,
In thousands		2008		2007
Net Sales
Underground Mining Machinery	$	350,910	$	327,121
Surface Mining Equipment		289,419		233,345
Consolidated Total	$	640,329	$	560,466
Operating Income
Underground Mining Machinery	$	62,755	$	58,126
Surface Mining Equipment		56,072		43,022
Total operations		118,827		101,148
Corporate		(7,656)		(7,166)
Consolidated Total		111,171		93,982
Interest income		2,564		2,668
Interest expense		(6,814)		(7,110)
Reorganization items		(1,884)		(150)
Income before income taxes	$	105,037	$	89,390

15. Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 provides a definition of fair value, establishes a framework for measuring fair value within GAAP, and expands disclosures about fair value measurements. SFAS 157 becomes effective for us beginning in fiscal 2009. We are currently evaluating the adoption of SFAS 157 to determine the effect on our financial statements and related disclosures.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. SFAS 159 becomes effective for us beginning in fiscal 2009. We are currently evaluating the adoption of SFAS 159 to determine the effect on our financial statements and related disclosures.

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In December 2007, the FASB issued SFAS No. 141 (Revised), Business Combinations (“SFAS 141(R)”). SFAS 141(R) requires the measurement at fair value of assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree as of the acquisition date. SFAS 141(R) also requires that acquisition related costs and costs to restructure the acquiree be expensed as incurred. SFAS 141(R) becomes effective for us beginning in fiscal 2010.

16. Discontinued Operations

In November 2005, we concluded the sale of the stock of The Horsburgh & Scott Co. (“H&S”), a wholly owned subsidiary, to members of the management team for cash and a note receivable of approximately $12.0 million. The gain on the sale of $1.8 million (pre-tax) was deferred until realizability was reasonably assured. During the quarter ended February 1, 2008, we collected the entire amount receivable and realized the deferred gain, net of taxes, as income from discontinued operations on the Condensed Consolidated Statement of Income.

17. Subsequent Events

On February 14, 2008 we completed the previously announced acquisition of N.E.S. Investment Co. (“Parent”) and thereby its subsidiary, Continental Global Group, Inc. (“Continental”) a worldwide leader in conveyor systems for bulk material handling in mining and industrial applications. The Continental acquisition further strengthens our ability to provide a more complete mining solution to our customers. We purchased all of the outstanding shares of the Parent for an aggregate amount of $270.0 million, which includes approximately $5.9 million of indebtedness assumed by us at closing. We are currently evaluating the fair value of the assets and liabilities acquired, including intangible assets.

The Continental acquisition was funded in part through available cash and credit resources and a new $175.0 million term loan supplement to our existing credit agreement (“second amendment”). The second amendment calls for quarterly principal payments of 2.5% of the initial term loan through October 31, 2011, and at which time the remaining outstanding principal equal to 62.5% of the initial term loan is due. Initial outstanding borrowings bear interest equal to the Base Rate. As part of the second amendment, we may request an increase to the term loan outstanding not to exceed $75.0 million. No changes were made to existing financial covenants.

18. Subsidiary Guarantors

The following tables present condensed consolidated financial information as of and for the quarter ended February 1, 2008 and January 26, 2007 for; (a) the Company; (b) on a combined basis, the guarantors of the Credit Agreement and Senior Notes issued in November 2006, which include Joy Technologies Inc. and P&H Mining Equipment Inc. (“Subsidiary Guarantors”); and (c) on a combined basis, the non-guarantors, which include all of our foreign subsidiaries and a number of small domestic subsidiaries (“Non-Guarantor Subsidiaries”). Separate financial statements of the Subsidiary Guarantors are not presented because the guarantors are unconditionally, jointly, and severally liable under the guarantees, and we believe such separate statements or disclosures would not be useful to investors.

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Condensed Consolidated

Statement of Income

Three Months Ended February 1, 2008

(In thousands)

			Parent		Subsidiary		Non-Guarantor
			Company		Guarantors		Subsidiaries		Eliminations		Consolidated
Net sales		$	-	$	399,423	$	394,618	$	(153,712)	$	640,329
Cost of sales			-		273,808		273,568		(118,946)		428,430
Product development, selling
	and administrative expenses		7,638		47,221		46,677		-		101,536
Other income			-		10,467		(11,275)		-		(808)
Restructuring charges			-		-		-		-		-
Operating income (loss)			(7,638)		67,927		85,648		(34,766)		111,171
Intercompany items			(3,307)		(7,880)		(13,395)		24,582		-
Interest income (expense) - net			(5,991)		230		1,511		-		(4,250)
Reorganization items			(1,476)		-		(408)		-		(1,884)
Income (loss) from continuing operations
	before income taxes and equity		(18,412)		60,277		73,356		(10,184)		105,037
(Provision) benefit for income taxes			7,089		(28,666)		(13,549)		-		(35,126)
Equity in income (loss) of subsidiaries			82,375		21,539		-		(103,914)		-
Income (loss) from continuing operations			71,052		53,150		59,807		(114,098)		69,911
Income from discontinued operations			-		1,141		-		-		1,141
Net income		$	71,052	$	54,291	$	59,807	$	(114,098)	$	71,052

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Condensed Consolidated

Statement of Income

Three Months Ended January 26, 2007

(In thousands)

			Parent		Subsidiary		Non-Guarantor
			Company		Guarantors		Subsidiaries		Eliminations		Consolidated
Net sales		$	-	$	363,696	$	335,340	$	(138,570)	$	560,466
Cost of sales			-		253,340		246,411		(114,152)		385,599
Product development, selling
	and administrative expenses		7,110		41,662		33,078		-		81,850
Other income			-		8,472		(9,437)		-		(965)
Operating income (loss)			(7,110)		60,222		65,288		(24,418)		93,982
Intercompany items			(250)		(8,101)		(12,753)		21,104		-
Interest income (expense) - net			(5,081)		209		430		-		(4,442)
Reorganization items			(150)		-		-		-		(150)
Income (loss) before income taxes
	and equity		(12,591)		52,330		52,965		(3,314)		89,390
(Provision) benefit for income taxes			4,643		(24,185)		(10,183)		-		(29,725)
Equity in income (loss) of subsidiaries			67,613		35,081		4,087		(106,781)		-
Net income		$	59,665	$	63,226	$	46,869	$	(110,095)	$	59,665

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Condensed Consolidated

Balance Sheet

February 1, 2008

(In thousands)

				Parent		Subsidiary		Non-Guarantor
				Company		Guarantors		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
	Cash and cash equivalents		$	75,486	$	6,138	$	145,320	$	-	$	226,944
	Accounts receivable-net			-		202,706		352,983		(3,088)		552,601
	Inventories			-		424,752		472,346		(96,658)		800,440
	Other current assets			38,040		9,245		25,585		(1,451)		71,419
		Total current assets		113,526		642,841		996,234		(101,197)		1,651,404
Property, plant and equipment-net				167		153,064		84,388		-		237,619
Intangible assets-net				-		71,832		6,744		-		78,576
Investment in affiliates				1,881,644		956,459		221,548		(3,059,651)		-
Intercompany accounts receivable-net				(839,345)		289,788		667,260		(117,703)		-
Deferred income taxes				236,244		-		-		-		236,244
Prepaid benefit costs				-		-		1,910		-		1,910
Other assets				1,816		14,607		14,069		-		30,492
		Total assets	$	1,394,052	$	2,128,591	$	1,992,153	$	(3,278,551)	$	2,236,245
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
	Short-term notes payable, including current portion
	of long-term debt		$	-	$	13	$	211	$	-	$	224
	Trade accounts payable			1,418		102,691		79,104		-		183,213
	Employee compensation and benefits			8,152		25,251		20,628		-		54,031
	Advance payments and progress billings			-		205,958		259,176		(38,001)		427,133
	Accrued warranties			-		26,047		22,736		-		48,783
	Other accrued liabilities			9,740		27,898		72,930		(2,921)		107,647
		Total current liabilities		19,310		387,858		454,785		(40,922)		821,031
Long-term debt				395,224		152		766		-		396,142
Other non-current liabilities				225,395		12,341		27,213		-		264,949
Shareholders' equity (deficit)				754,123		1,728,240		1,509,389		(3,237,629)		754,123
		Total liabilities and shareholders' equity (deficit)	$	1,394,052	$	2,128,591	$	1,992,153	$	(3,278,551)	$	2,236,245

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Condensed Consolidated

Balance Sheet

October 26, 2007

(In thousands)

				Parent		Subsidiary		Non-Guarantor
				Company		Guarantors		Subsidiaries		Eliminations		Consolidated
ASSETS
Current assets:
	Cash and cash equivalents		$	36,614	$	11,394	$	125,240	$	-	$	173,248
	Accounts receivable-net			-		228,080		338,714		(6,552)		560,242
	Inventories			-		378,069		425,878		(76,587)		727,360
	Other current assets			37,026		21,145		21,248		(2,474)		76,945
		Total current assets		73,640		638,688		911,080		(85,613)		1,537,795
Property, plant and equipment-net				177		147,781		86,071		-		234,029
Intangible assets-net				-		68,998		10,718		-		79,716
Investment in affiliates				1,905,608		914,767		214,965		(3,035,340)		-
Intercompany accounts receivable-net				(864,779)		217,697		686,627		(39,545)		-
Deferred income taxes				248,139		-		-		-		248,139
Prepaid benefit costs				-		-		779		-		779
Other assets				1,898		16,463		16,084		-		34,445
		Total assets	$	1,364,683	$	2,004,394	$	1,926,324	$	(3,160,498)	$	2,134,903
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
	Short-term notes payable, including current portion
	of long-term debt		$	-	$	13	$	227	$	-	$	240
	Trade accounts payable			1,523		91,181		106,494		-		199,198
	Employee compensation and benefits			7,803		25,849		25,838		-		59,490
	Advance payments and progress billings			-		171,369		179,298		(26,565)		324,102
	Accrued warranties			-		25,250		24,132		-		49,382
	Other accrued liabilities			15,498		31,348		77,515		(3,234)		121,127
		Total current liabilities		24,824		345,010		413,504		(29,799)		753,539
Long-term debt				395,152		149		956		-		396,257
Other non-current liabilities				220,713		12,472		27,928		-		261,113
Shareholders' equity (deficit)				723,994		1,646,763		1,483,936		(3,130,699)		723,994
		Total liabilities and shareholders' equity (deficit)	$	1,364,683	$	2,004,394	$	1,926,324	$	(3,160,498)	$	2,134,903

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Condensed Consolidated

Statement of Cash Flows

Three Months Ended February 1, 2008

(In thousands)

			Parent		Subsidiary		Non-Guarantor
			Company		Guarantors		Subsidiaries		Eliminations		Consolidated
Net cash provided (used) by operations		$	61,391	$	(4,926)	$	29,348	$	-	$	85,813
Investing Activities:
	Proceeds from the sale of business		-		9,868		-		-		9,868
	Property, plant and equipment acquired		-		(10,328)		(5,422)		-		(15,750)
	Proceeds from the sale of property, plant and equipment		-		-		156		-		156
	Other - net		(177)		127		57		-		7
	Net cash used by investing activities		(177)		(333)		(5,209)		-		(5,719)
Financing Activities:
	Exercise of stock options		3,770		-		-		-		3,770
	Excess income tax benefit from exercise of stock options		1,922		-		-		-		1,922
	Dividends paid		(16,123)		-		-		-		(16,123)
	Purchase of treasury stock		(11,911)		-		-		-		(11,911)
	Issuance of senior notes		-		-		-		-		-
	Financing fees		-		-		-		-		-
	Borrowings (payments) on long-term obligations, net		-		3		(84)		-		(81)
	Increase (decrease) in short-term notes payable, net		-		-		-		-		-
	Net cash (used) provided by financing activities		(22,342)		3		(84)		-		(22,423)
Effect of Exchange Rate Changes on Cash and
	Cash Equivalents		-		-		(3,975)		-		(3,975)
Increase (Decrease) in Cash and Cash Equivalents			38,872		(5,256)		20,080		-		53,696
Cash and Cash Equivalents at Beginning of Period			36,614		11,394		125,240		-		173,248
Cash and Cash Equivalents at End of Period		$	75,486	$	6,138	$	145,320	$	-	$	226,944

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Condensed Consolidated

Statement of Cash Flows

Three Months Ended January 26, 2007

(In thousands)

			Parent		Subsidiary		Non-Guarantor
			Company		Guarantors		Subsidiaries		Eliminations		Consolidated
Net cash provided (used) by operating activities		$	(9,770)	$	(13,754)	$	4,540	$	-	$	(18,984)
Investing Activities:
	Acquisition of business, net of cash received		-		(97)		(8,454)		-		(8,551)
	Property, plant and equipment acquired		-		(8,400)		(3,742)		-		(12,142)
	Other - net		(83)		235		(204)		-		(52)
	Net cash used by investing activities		(83)		(8,262)		(12,400)		-		(20,745)
Financing Activities:
	Exercise of stock options		3,572		-		-		-		3,572
	Excess income tax benefit from exercise of stock options		1,521		-		-		-		1,521
	Dividends paid		(17,313)		-		-		-		(17,313)
	Purchase of treasury stock		(359,704)		-		-		-		(359,704)
	Issuance of senior notes		394,874		-		-		-		394,874
	Financing fees		(976)		-		-		-		(976)
	Borrowings (payments) on long-term obligations, net		(14,000)		5		(98)		-		(14,093)
	Decrease in short-term notes payable, net		-		-		(1,486)		-		(1,486)
	Net cash (used) provided by financing activities		7,974		5		(1,584)		-		6,395
Effect of Exchange Rate Changes on Cash and
	Cash Equivalents		-		-		2,179		-		2,179
Decrease in Cash and Cash Equivalents			(1,879)		(22,011)		(7,265)		-		(31,155)
Cash and Cash Equivalents at Beginning of Period			(1,270)		24,970		77,554		-		101,254
Cash and Cash Equivalents at End of Period		$	(3,149)	$	2,959	$	70,289	$	-	$	70,099

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

The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes to the Condensed Consolidated Financial Statements in Part I of this report. Dollar amounts are in thousands, except share and per share data and as indicated.

Overview

Joy Global Inc., a worldwide leader in high-productivity mining solutions, manufactures and markets original equipment and aftermarket parts and services for both the underground and aboveground mining industries through two business segments, underground mining machinery and surface mining equipment. Our principal manufacturing facilities are located in the United States, including facilities in Pennsylvania and Wisconsin, and in the United Kingdom, South Africa, Chile, Australia and China.

Operating results during the first quarter of fiscal 2008 represent the continued growth of international commodity markets combined with signs of recovery in U.S. coal markets. Net sales for the first quarter of fiscal 2008 totaled $640.3 million compared with $560.5 million in the first quarter of fiscal 2007. Aftermarket revenue grew by 18% in the quarter while original equipment grew by 9%. Operating income totaled $111.2 million in the first quarter fiscal 2008 compared to $94.0 million in the prior year first quarter. Net income increased to $71.1 million in the quarter as compared to $59.7 million in the first quarter fiscal 2007.

Results of Operations

Net Sales

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

			Quarter Ended
			February 1,		January 26,		$	%
In thousands			2008		2007		Change	Change
Net Sales
	Underground Mining Machinery	$	350,910	$	327,121	$	23,789	7.3%
	Surface Mining Equipment		289,419		233,345		56,074	24.0%
	Total	$	640,329	$	560,466	$	79,863	14.2%

The increase in net sales for underground mining machinery in the first quarter of 2008 was the result of a $1.7 million increase in original equipment shipments and a $22.1 million increase in the sale of aftermarket products. Increased original equipment sales were reported in emerging markets served out of the United Kingdom, China and South Africa offset by decreased sales in United States and Australia. In the emerging markets served out of the United Kingdom, $38.4 million of the original equipment sales was due to a roof support system in the first quarter of fiscal 2008. Aftermarket sales increased by $13.6 million and $5.9 million in China and Australia, respectively on continued global demand for coal.

The increase in net sales for surface mining equipment in the first quarter was the result of a $19.5 million increase in original equipment and a $36.6 million increase in aftermarket parts and service. The market for original equipment continues to remain strong globally. During the 2008 quarter, original equipment sales were particularly strong in the United States, Chile, China and Canada due to the continued strength in the demand for

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coal, copper and oil. Aftermarket sales increased in the United States, Canada and Chile by $22.5 million, $10.1 million and $9.0 million, respectively, on continued global demand for copper, oil and coal. All other markets showed modest to flat aftermarket results versus the prior year, primarily due to timing of shipments.

Operating Income

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

			Quarter Ended
			February 1, 2008			January 26, 2007
			Operating	%		Operating	%
In thousands			Income (loss)	of Net Sales		Income (loss)	of Net Sales
Operating income (loss):
	Underground Mining Machinery	$	62,755	17.9%	$	58,126	17.8%
	Surface Mining Equipment		56,072	19.4%		43,022	18.4%
	Corporate Expense		(7,656)			(7,166)
	Total	$	111,171	17.4%	$	93,982	16.8%

Operating income as a percentage of net sales for Underground Mining Machinery increased from 17.8% in the first quarter of 2007 to 17.9% in the first quarter of 2008. The increase in operating profit was due to increased sales volume and $3.6 million less purchase accounting amortization related to the Stamler acquisition offset by increased product development, selling and administrative expenses of $7.9 million and increased incentive compensation expense of $1.7 million.

Operating income as a percentage of net sales for Surface Mining Equipment increased from 18.4% in the first quarter of 2007 to 19.4% in the first quarter of 2008. The increase in operating profit was due to increased sales volume and a more favorable mix of original equipment and aftermarket products offset by increased product development, selling and administrative expenses of $10.8 million.

Product Development, Selling and Administrative Expense

Product development, selling and administrative expense totaled $101.5 million, or 15.9% of sales, in the first quarter of fiscal 2008, as compared to $81.9 million, or 14.6% of sales, in the first quarter of fiscal 2007. Increased product development, selling and administrative expense was attributable to strategic operational initiatives, including expanded local infrastructures, $3.6 million of higher selling expenses related to increased business activity and the development of emerging markets, $3.2 million of foreign exchange rate expense and $4.0 million in incentive based compensation expense.

Provision for Income Taxes

Income tax expense from continuing operations for the first quarter of fiscal 2008 increased to $35.1 million as compared to $29.7 million in the first quarter of fiscal 2007. These income tax provisions represented effective income tax rates for the first quarters of fiscal 2008 and 2007 of 33%. The primary drivers of the effective income tax rate in comparison to the Statutory rate of 35% for both quarters was a mix of earnings and tax incentives/credits offset by U.S. state income taxes.

A review of income tax valuation reserves was performed as part of the analysis of the first quarter of fiscal 2008 and 2007 income tax provisions, respectively, and no discrete adjustments were warranted for either period.

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Cash taxes paid for the first quarter of fiscal 2008 were $21.6 million compared to $15.3 million in the first quarter of fiscal 2007. This increase in cash taxes paid was primarily due to increased foreign taxes year over year caused by increases in profitability and decreased benefits from net operating loss carryforwards.

Bookings and Backlog

Bookings for the first quarter of fiscal 2008 were approximately $870.0 million compared to bookings of $565.4 million in the first quarter of fiscal 2007. Orders in the first quarter of fiscal 2008 for original equipment increased 97% primarily due to powered roof support and armored face conveyor demand in Australia, Russia and China and increased U.S. orders of continuous miners and shuttle cars. Aftermarket orders increased by 28% in the quarter on continued strength across all surface mining equipment and underground mining machinery markets reflecting the high utilization levels of the current installed base of equipment.

Due to the continued strength of all surface mining markets, international underground mining markets and the increased activity in the underground U.S. coal market, backlog as of February 1, 2008 increased to $1.9 billion from $1.6 billion at October 26, 2007.

Liquidity and Capital Resources

The following table summarizes the major components of our working capital as of the quarters ended February 1, 2008 and October 26, 2007, respectively:

		February 1,		October 26,
In millions		2008		2007
Cash and cash equivalents	$	226.9	$	173.2
Accounts receivable		552.6		560.2
Inventories		800.4		727.4
Other current assets		71.5		77.0
Short-term debt		(0.2)		(0.2)
Accounts payable		(183.2)		(199.2)
Employee compensation and benefits		(54.0)		(59.5)
Advance payments and progress billings		(427.1)		(324.1)
Accrued warranties		(48.8)		(49.4)
Other current liabilities		(107.7)		(121.1)
Working Capital	$	830.4	$	784.3

We currently use working capital and cash flow production as two financial measurements to evaluate the performance of our operations and our ability to meet our financial obligations. We continue to require working capital investment to maintain our position as a leading manufacturer and servicer of high productivity mining equipment. The primary drivers of these requirements are funding for purchases of production and replacement parts inventories. Our position as a market leader in providing timely service and repair requires us to maintain a certain level of replacement parts. As part of our continuous improvement of purchasing and manufacturing processes, we continue to strive for alignment of inventory levels with customer demand and current production schedules.

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We continue to anticipate that capital spending will be 3.5% to 4.0% of sales primarily due to a number of programs to increase our manufacturing capacity and to continue the expansion of our aftermarket service capabilities.

Expansion efforts continued at our surface mining operations during the quarter. Efforts continued on a $50.0 million expansion in proprietary component machining capabilities for P&H Mining at our Tianjin, China campus, with start-up being projected in spring 2008, with full production targeted for 2009. The next phase of our expansion will be an approximately 150,000 square foot facility in Tianjin, China and will give us further transmission assembly capabilities. We also continue to expand outsourcing arrangements for certain non-proprietary P&H components, such as large fabrications, in areas of the world in which the products are ultimately destined.

During the first quarter of fiscal 2008, cash provided by operating activities was $85.8 million compared to cash used by operating activities of $19.0 million during the first quarter of fiscal 2007. Cash provided by operating activities in fiscal 2008 was mainly impacted by the collection of advance payments at both segments. Lower incentive compensation payouts and timing of accounts payable payments in the first quarter of fiscal 2008 also contributed to the cash generated by operating activities. The increase was offset by increasing inventory levels related to the development of emerging markets and increased business activity.

During the first quarter of fiscal 2008 cash used by investing activities was $5.7 million compared to cash used by investing activities of $20.7 million during the first quarter of fiscal 2007. Proceeds from the collection of a note receivable related to the fiscal 2006 sale of The Horsburgh & Scott Company of $9.9 million were collected in the first quarter of fiscal 2008. The fiscal 2007 cash used by investing activities included the $8.6 million acquisition of a repair and rebuild facility in Australia during the first quarter of fiscal 2007.

During the first quarter of fiscal 2008 cash used by financing activities was $22.4 million compared to cash provided by financing activities of $6.4 million in the first quarter fiscal 2007. Fiscal 2008 cash used by financing activities mainly consisted of $11.9 million of cash used as part of the share repurchase program and $16.1 million of quarterly dividend payments.

Under our share repurchase program, management is authorized to repurchase shares of the Company’s common stock up to $1.0 billion in shares in the open market or through privately negotiated transactions until December 31, 2008. Through February 1, 2008, we have repurchased approximately $807.1 million of common stock, representing 17,445,212 shares, under the program including approximately $11.9 million of common stock, representing 221,500 shares, during the quarter ended February 1, 2008.

On November 20, 2007, our Board of Directors declared a cash dividend of $0.15 per outstanding share of common stock. The dividend was paid on December 19, 2007 to all stockholders of record at the close of business on December 5, 2007.

Continental Acquisition

On February 14, 2008 we completed the previously announced acquisition of N.E.S. Investment Co. (“Parent”) and thereby its subsidiary, Continental Global Group, Inc. (“Continental”) a worldwide leader in conveyor systems for bulk material handling in mining and industrial applications. The Continental acquisition further strengthens our ability to provide a more complete mining solution to our customers. We purchased all of the outstanding shares of the Parent for an aggregate amount of $270.0 million, which includes approximately $5.9 million of indebtedness assumed by Joy Global at closing. The purchase price was funded in part through available cash and credit resources and a new $175.0 million term loan supplement to our existing credit facility (“Second Amendment”). We are currently evaluating the fair value of the assets and liabilities acquired, including intangible assets.

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The Second Amendment calls for quarterly principal payments of 2.5% of the initial term loan through October 31, 2011, and at which time the remaining outstanding principal equal to 62.5% of the initial term loan is due. Initial outstanding borrowings bear interest equal to the Base Rate. As part of the Second Amendment, we may request an increase to the term loan outstanding not to exceed $75.0 million. No changes were made to existing financial covenants.

Financial Condition

As of the end of the first quarter fiscal 2008, we had $226.9 million in cash and cash equivalents and $282.0 million available for borrowings under the Credit Agreement. Our primary cash requirements include working capital, capital expenditures, dividends and share repurchases. We will also continue to evaluate potential acquisitions. Target acquisitions would include “bolt-on” businesses which would be mining related product line additions or service extensions or “third leg” businesses that would provide a strong branded, highly engineered product with the platform for our life-cycle management strategy and provide a solid base for growth potential. Based upon our current level of operations, we believe that cash flows from operations, together with available borrowings under the Credit Agreement, inclusive of the Second Amendment to our Credit Agreement, will be adequate to meet our anticipated future cash requirements.

Off-Balance Sheet Arrangements

We lease various assets under operating leases. No significant changes to lease commitments have occurred since our fiscal year ended October 26, 2007. We have no other off-balance sheet arrangements, other than noted in Note 8 to the Condensed Consolidated Financial Statements.

Critical Accounting Estimates, Assumptions and Policies

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

We believe our accounting policies for revenue recognition, inventories, intangible assets, accrued warranties, pension and postretirement benefits and costs, and income taxes are the ones that most frequently require us to make estimates and judgments, and therefore are critical to the understanding of our results of operations. See Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended October 26, 2007 for a discussion of these policies. There were no material changes to these policies during the first quarter of fiscal 2008.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

As more fully described in our Annual Report on Form 10-K for the year ended October 26, 2007, we are exposed to various types of market risks, primarily foreign currency risks. We monitor our risks in this area on a continuous basis and generally enter into forward foreign currency contracts to minimize these exposures for periods of less than one year. We do not engage in speculation in our derivative strategies. Gains and losses

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from foreign currency contract activities are offset by changes in the underlying costs of the transactions being hedged.

Item 4.Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of such date, our disclosure controls and procedures are effective (1) in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act and (2) to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during our fiscal quarter ended February 1, 2008, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.Legal Proceedings

No change.

Item 1A.Risk Factors

During the quarter ended February 1, 2008, there were no material changes from the risk factors disclosed in our Item 1A of our Annual Report on Form 10-K for the fiscal year ended October 26, 2007. Except as set forth below, there have been no material changes from the risk factors disclosed in our Form 10-K since the end of our most recently completed fiscal quarter.

We may not be able to integrate the acquisition of Continental successfully, which may have a material adverse impact on our ability to realize anticipated synergies from the acquisition and our future growth and operating performance.

On February 14, 2008, we completed the acquisition of N.E.S. Investment Co. and its subsidiary, Continental Global Group. The successful integration of Continental will require substantial attention from our management team. The diversion of management attention and any other difficulties we encounter in the integration process could have a material adverse effect on our ability to realize anticipated cost savings and synergies from the acquisition. Difficulties that arise integrating Continental may also have a material adverse effect on our future growth and results of operations. We cannot provide any assurance that we will be able to integrate the operations of Continental successfully, that we will be able to fully realize anticipated synergies from the acquisition, or that we will be able to operate Continental’s business successfully.

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

(a) Not applicable.

(b) Not applicable.

(c) We made the following purchases of our common stock, par value $1.00 per share, during the period covered by this report:

						Maximum Approximate
						Dollar Value of Shares
				Total Number of Shares		that May Yet Be
				Purchased as Part of		Purchased Under the
	Total Number of		Average Price	Publicly Announced		Plans or Programs
Period	Shares Purchased		Paid per Share	Plans or Programs		(in millions)*
October 27, 2007 to	221,500	$	53.77	221,500	$	192.9
November 26, 2007
November 27, 2007 to	-	$	-	-	$	192.9
December 26, 2007
December 27, 2007 to	-	$	-	-	$	192.9
January 24, 2008

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*All purchases were made under our stock repurchase plan announced on May 31, 2005, which originally authorized the repurchase of $300.0 million in common stock. On September 12, 2006, the stock repurchase plan was increased to a level of $1.0 billion and extended until the end of calendar 2008.

Item 3.Defaults upon Senior Securities

Not applicable.

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

Not applicable.

Item 5.Other Information

Not applicable.

Item 6.Exhibits

2.1	Purchase Agreement by and among Joy Global Inc., NES Group, Inc. and N.E.S. Investment Co. (incorporated by reference to exhibit 2.1 to current report of Joy Global Inc. on Form 8-K dated January 11, 2008, File No. 01-9299)
10.1	Second Amendment to Credit Agreement dated as of February 14, 2008 and entered into among Joy Global Inc., as Borrower, the lenders listed therein, as Lenders, and Bank of America, N.A. as Administrative Agent (incorporated by reference to Exhibit 10.1 to current report of Joy Global Inc. on Form 8-K dated February 19, 2008, File No. 01-9299).
31.1	Chief Executive Officer Rule 13a-14(a)/15d-14(a) Certifications
31.2	Chief Financial Officer Rule 13a-14(a)/15d-14(a) Certifications
32	Section 1350 Certifications

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	JOY GLOBAL INC
	(Registrant)
	/s/ James H. Tate
Date March 7, 2008	James H. Tate
	Chief Financial Officer
	/s/ Michael S. Olsen
Date March 7, 2008	Michael S. Olsen
	Vice President and
	Chief Accounting Officer

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