Joy Global Inc.
JOY GLOBAL INC (Form: 10-Q, Received: 06/04/2012 17:02:50)
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(MARK ONE)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED April 27, 2012

OR

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD from            to             

Commission File number 001-09299

 

 

JOY GLOBAL INC.

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

Delaware   39-1566457
(State of Incorporation)  

(I.R.S. Employer

Identification No.)

 

100 East Wisconsin Ave, Suite 2780
Milwaukee, Wisconsin 53202
(Address of principal executive offices) (Zip Code)
(414) 319-8500
(Registrant’s Telephone Number, Including Area Code)

 

 

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days.     Yes   x     No   ¨

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

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

 

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

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

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

 

Class

   Outstanding at May 25, 2012
Common Stock, $1 par value    105,843,944

 

 

 


Table of Contents

JOY GLOBAL INC.

FORM 10-Q I NDEX

April 27, 2012

 

 

 

     PAGE NO.

PART I. – FINANCIAL INFORMATION

  

Item 1 – Financial Statements:

  

Condensed Consolidated Statement of Income – Quarter and Six Months Ended April  27, 2012 and April 29, 2011

   4

Condensed Consolidated Balance Sheet – April 27, 2012 and October 28, 2011

   5

Condensed Consolidated Statement of Cash Flows – Six Months Ended April 27, 2012 and April  29, 2011

   6

Notes to Condensed Consolidated Financial Statements

   7 – 30

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

   31 – 41

Item 3 – Quantitative and Qualitative Disclosures About Market Risk

   41

Item 4 – Controls and Procedures

   42

PART II. – OTHER INFORMATION

  

Item 1 – Legal Proceedings

   43

Item 1A – Risk Factors

   43

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

   43

Item 3 – Defaults Upon Senior Securities

   43

Item 4 – Mine Safety Disclosures

   43

Item 5 – Other Information

   43

Item 6 – Exhibits

   44

Signature

   45


Table of Contents

Forward-Looking Statements

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


Table of Contents

PART I. - FINANCIAL INFORMATION

Item 1. Financial Statements

JOY GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

(In thousands, except per share amounts)

 

     Quarter Ended     Six Months Ended  
     April 27,
2012
    April 29,
2011
    April 27,
2012
    April 29,
2011
 

Net sales

   $ 1,541,060      $ 1,062,729      $ 2,677,261      $ 1,932,261   

Costs and expenses:

        

Cost of sales

     1,030,689        689,858        1,803,465        1,273,989   

Product development, selling and administrative expenses

     182,033        141,530        353,389        273,660   

Other income

     (5,099     (2,721     (26,776     (3,248
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     333,437        234,062        547,183        387,860   

Interest income

     1,336        4,713        2,529        8,158   

Interest expense

     (18,456     (7,895     (35,726     (15,726

Reorganization items

     —          —          —          (35
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations before income taxes

     316,317        230,880        513,986        380,257   

Provision for income taxes

     98,365        68,908        153,515        116,053   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

     217,952        161,972        360,471        264,204   

Income from continuing operations attributable to non-controlling interest

     (33     —          (142     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations attributable to Joy Global Inc.

     217,919        161,972        360,329        264,204   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from discontinued operations, net of income taxes

     (4,331     —          (4,389     —     

Loss from discontinued operations, net of income taxes attributable to non-controlling interest

     —          —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from discontinued operations, net of income taxes attributable to Joy Global Inc.

     (4,331     —          (4,389     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     213,621        161,972        356,082        264,204   

Net income attributable to non-controlling interest

     (33     —          (142     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Joy Global Inc.

   $ 213,588      $ 161,972      $ 355,940      $ 264,204   
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings (loss) per share:

        

Continuing operations

   $ 2.06      $ 1.54      $ 3.41      $ 2.53   

Discontinued operation

     (0.04     —          (0.04     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

   $ 2.02      $ 1.54      $ 3.37      $ 2.53   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) per share:

        

Continuing operations

   $ 2.04      $ 1.52      $ 3.37      $ 2.48   

Discontinued operation

     (0.04     —          (0.04     —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net Income

   $ 2.00      $ 1.52      $ 3.33      $ 2.48   
  

 

 

   

 

 

   

 

 

   

 

 

 

Dividends per share

   $ 0.175      $ 0.175      $ 0.35      $ 0.35   
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding:

        

Basic

     105,951        105,048        105,678        104,603   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     106,983        106,646        106,868        106,345   
  

 

 

   

 

 

   

 

 

   

 

 

 

See Notes to Condensed Consolidated Financial Statements.

 

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JOY GLOBAL INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

(In thousands)

 

     April 27,
2012
     October 28,
2011
 

ASSETS

     

Current assets:

     

Cash and cash equivalents

   $ 390,977       $ 288,321   

Cash held in escrow

     16,300         866,000   

Accounts receivable, net

     1,151,909         884,696   

Inventories

     1,536,750         1,334,134   

Other current assets

     190,989         190,568   

Current assets of discontinued operations

     —           288   
  

 

 

    

 

 

 

Total current assets

     3,286,925         3,564,007   

Property, plant and equipment, net

     743,584         539,571   

Investment in unconsolidated affiliate

     —           380,114   

Other intangible assets, net

     591,942         385,441   

Goodwill

     1,389,296         428,478   

Deferred income taxes

     67,511         73,123   

Other non-current assets

     143,331         55,448   

Non-current assets of discontinued operations

     —           172   
  

 

 

    

 

 

 

Total assets

   $ 6,222,589       $ 5,426,354   
  

 

 

    

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

     

Current liabilities:

     

Short-term notes payable, including current portion of long-term obligations

   $ 79,896       $ 35,895   

Trade accounts payable

     492,287         452,519   

Employee compensation and benefits

     110,750         147,664   

Advance payments and progress billings

     837,800         771,841   

Accrued warranties

     102,429         82,737   

Other accrued liabilities

     308,843         206,588   

Current liabilities of discontinued operations

     23,372         27,327   
  

 

 

    

 

 

 

Total current liabilities

     1,955,377         1,724,571   

Long-term obligations

     1,557,141         1,356,412   

Accrued pension costs

     244,974         332,452   

Other liabilities

     120,561         61,124   
  

 

 

    

 

 

 

Total liabilities

     3,878,053         3,474,559   
  

 

 

    

 

 

 

Shareholders’ equity attributable to Joy Global Inc.

     2,328,149         1,951,795   

Non-controlling interest

     16,387         —     
  

 

 

    

 

 

 

Total equity

     2,344,536         1,951,795   
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 6,222,589       $ 5,426,354   
  

 

 

    

 

 

 

See Notes to Condensed Consolidated Financial Statements.

 

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JOY GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

(In thousands)

 

     Six Months Ended  
     April 27,
2012
    April 29,
2011
 

Operating Activities:

    

Net income

   $ 356,082      $ 264,204   

Loss from discontinued operations

     4,389        —     

Adjustments to continuing operations:

    

Depreciation and amortization

     80,344        31,648   

Deferred income taxes

     24,184        3,303   

Excess income tax benefit from share-based payment awards

     (20,837     (16,880

Contributions to retiree benefit plans

     (92,063     (87,872

Retiree benefit plan expense

     21,554        25,653   

Other, net

     (26,901     6,579   

Changes in Working Capital Items Attributed to Continuing Operations, net of acquisition:

    

Accounts receivable, net

     (91,265     (34,610

Inventories, net

     (167,960     (152,507

Other current assets

     (24,996     (16,160

Trade accounts payable

     (41,797     24,993   

Employee compensation and benefits

     (41,791     (40,698

Advance payments and progress billings

     64,461        221,899   

Other accrued liabilities

     53,043        20,283   
  

 

 

   

 

 

 

Net cash provided by operating activities – continuing operations

     96,447        249,835   

Net cash used by operating activities – discontinued operations

     (10,158     —     
  

 

 

   

 

 

 

Net cash provided by operating activities

     86,289        249,835   
  

 

 

   

 

 

 

Investing Activities:

    

Property, plant and equipment acquired

     (114,092     (53,098

Acquisition of controlling interest in International Mining Machinery, net of cash acquired

     (939,449     —     

Withdrawal of cash held in escrow

     849,700        —     

Other, net

     1,549        164   
  

 

 

   

 

 

 

Net cash used by investing activities – continuing operations

     (202,292     (52,934

Net cash provided by investing activities – discontinued operations

     —          —     
  

 

 

   

 

 

 

Net cash used by investing activities

     (202,292     (52,934
  

 

 

   

 

 

 

Financing Activities:

    

Share-based payment awards

     30,501        67,617   

Dividends paid

     (36,909     (36,488

Proceeds from Further Term Loan

     250,000        —     

Change in short and long-term obligations, net

     (20,285     3,151   

Financing fees

     (1,620     (135
  

 

 

   

 

 

 

Net cash provided by financing activities – continuing operations

     221,687        34,145   

Net cash provided by financing activities – discontinued operations

     —          —     
  

 

 

   

 

 

 

Net cash provided by financing activities

     221,687        34,145   
  

 

 

   

 

 

 

Effect of Exchange Rate Changes on Cash and Cash Equivalents

     (3,028     24,514   
  

 

 

   

 

 

 

Increase in Cash and Cash Equivalents

     102,656        255,560   

Cash and Cash Equivalents at Beginning of Period

     288,321        815,581   
  

 

 

   

 

 

 

Cash and Cash Equivalents at End of Period

   $ 390,977      $ 1,071,141   
  

 

 

   

 

 

 

See Notes to Condensed Consolidated Financial Statements.

 

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business

Joy Global Inc. (the “Company”) is a worldwide leader in high productivity mining solutions, and we manufacture and market original equipment and aftermarket parts and services for both underground and surface mining and certain industrial applications. Our equipment is used in major mining regions throughout the world to mine coal, copper, iron ore, oil sands and other minerals. We operate in two business segments: Underground Mining Machinery and Surface Mining Equipment. We are a major manufacturer of underground mining equipment for the extraction of coal and other bedded minerals and offer comprehensive service locations near major mining regions worldwide. We are also a major producer of surface mining equipment for the extraction of ores and minerals and we provide extensive operational support for many types of equipment used in surface mining.

 

2. Basis of Presentation

The Condensed Consolidated Financial Statements presented in this Quarterly Report on Form 10-Q are unaudited and have been prepared by us in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. In our opinion, all adjustments necessary for the fair presentation on a going concern basis of the results of operations, cash flows and financial position for all periods presented have been made. All such adjustments made are of a normal recurring nature. The preparation of the financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual amounts could differ from the estimates.

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

 

3. Acquisitions

Acquisition of a Controlling Interest in International Mining Machinery Holdings Limited

On December 29, 2011, we completed the purchase of 534.8 million shares of International Mining Machinery Holdings Limited (“IMM”). The shares, which represented approximately 41.1% of IMM’s outstanding common stock, were purchased pursuant to a stock purchase agreement, dated July 11, 2011, as amended and restated on July 14, 2011. The shares were purchased for HKD8.50 per share, or approximately $584.6 million. As a result of this and prior open market purchases, we acquired a controlling interest on such date of approximately 69.2% of IMM’s outstanding common stock and were required by Rule 26.1 of the Hong Kong Takeovers Code to commence a tender offer to purchase all of the outstanding shares of IMM common stock and options to purchase IMM common stock that we did not already own. The tender offer commenced on January 6, 2012 and we completed the tender offer on February 10, 2012. As a result of the tender offer, we beneficially own approximately 98.9% of IMM’s outstanding common stock. We intend to effect the compulsory acquisition of the remaining shares under applicable provisions of the Cayman Island Companies Law, under which IMM is incorporated. We expect to pay consideration of approximately $16.3 million, calculated at present exchange rates, to complete the compulsory acquisition. We expect to complete the compulsory acquisition of the remaining shares in our third fiscal quarter of 2012. The combined effect of these transactions will result in our beneficial ownership of 100% of the common stock of IMM.

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

 

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

 

(in thousands)

      

Assets Acquired:

  

Cash and cash equivalents

   $ 72,912   

Accounts receivable

     202,825   

Inventories

     92,376   

Other current assets

     15,622   

Property, plant and equipment

     123,600   

Other intangible assets and goodwill

     1,123,887   

Other non-current assets

     13,041   
  

 

 

 

Total assets acquired

     1,644,263   

Liabilities Assumed:

  

Short-term notes payable

     (14,666

Accounts payable

     (87,305

Employee compensation and benefits

     (6,458

Advance payments and progress billings

     (6,122

Other accrued liabilities

     (49,053

Other non-current liabilities

     (57,221
  

 

 

 

Total liabilities assumed

     (220,825
  

 

 

 
   $ 1,423,438   
  

 

 

 

The fair value for identified intangible assets was primarily determined based upon discounted expected cash flows. Of the $1.1 billion of intangible assets and goodwill, $175.0 million has been preliminarily assigned to intangible assets which are being amortized. The determination of the useful life was based upon historical experience, economic factors, and future cash flows of the assets acquired.

The results of IMM have been included in the condensed consolidated financial statements since the date of acquisition. We have incurred acquisition costs of $24.2 million related to IMM, of which $8.6 million was recognized in the prior fiscal year.

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

 

     Quarter Ended      Six Months Ended  
     April 29,
2011
     April 27,
2012
     April 29,
2011
 

Net sales

   $ 1,137,229       $ 2,731,840       $ 2,088,108   

Income from continuing operations

   $ 163,149       $ 358,806       $ 261,743   

Basic earnings per share from continuing operations

   $ 1.55       $ 3.40       $ 2.50   

Diluted earnings per share from continuing operations

   $ 1.53       $ 3.36       $ 2.46   

 

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

Acquisition of LeTourneau Technologies, Inc.

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

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

 

(in thousands)

      

Cash consideration

   $ 1,100,000   

Working capital purchase price adjustments

     (46,323
  

 

 

 
   $ 1,053,677   
  

 

 

 

The purchase price has been finalized, yet the allocation of the purchase price is subject to change for certain potential adjustments related to working capital. The allocation will be finalized upon agreement of the disposition of certain assets and liabilities related to the drilling products business. Adjustments have been made in the current quarter to reflect updated litigation and customer contract information and to update estimates related to the disposition of certain liabilities related to the drilling products business.

 

4. Inventories

Consolidated inventories consisted of the following:

 

(in thousands)

   April 27,
2012
     October 28,
2011
 

Finished goods

   $ 857,502       $ 832,730   

Work in process and purchased parts

     466,267         269,798   

Raw materials

     212,981         231,606   
  

 

 

    

 

 

 
   $ 1,536,750       $ 1,334,134   
  

 

 

    

 

 

 

April 27, 2012 inventories include $81.7 million attributable to the IMM acquisition.

 

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5. Warranties

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

 

     Quarter Ended     Six Months Ended  

(in thousands)

   April 27,
2012
    April 29,
2011
    April 27,
2012
    April 29,
2011
 

Balance, beginning of period

   $ 101,816      $ 61,479      $ 82,737      $ 62,351   

Accrual for warranty expensed during the period

     14,546        11,031        25,901        17,596   

Settlements made during the period

     (15,254     (7,238     (23,551     (15,668

Change in liability for pre-existing warranties during the period, including expirations

     677        98        11,518        242   

Effect of foreign currency translation

     644        1,406        27        2,255   

Acquired warranty - IMM

     —          —          5,797        —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Balance, end of period

   $ 102,429      $ 66,776      $ 102,429      $ 66,776   
  

 

 

   

 

 

   

 

 

   

 

 

 

An adjustment was made in the first quarter of fiscal 2012 to reflect a $10.0 million change in the liability for pre-existing warranties related to the mining equipment business of LeTourneau.

 

6. Borrowings and Credit Facilities

Direct borrowings and capital lease obligations consisted of the following:

 

(in thousands)

   April 27,
2012
    October 28,
2011
 

Term Loan due 2016

   $ 481,250      $ 493,750   

Further Term Loan due 2016

     247,188        —     

6.0% Senior Notes due 2016

     248,181        248,008   

6.625% Senior Notes due 2036

     148,453        148,441   

5.125% Senior Notes due 2021

     495,919        495,755   

Short-term notes payable and bank overdrafts

     14,157        4,140   

Capital leases and other

     1,889        2,213   
  

 

 

   

 

 

 
     1,637,037        1,392,307   

Less: Amounts due within one year

     (79,896     (35,895
  

 

 

   

 

 

 

Long-term obligations

   $ 1,557,141      $ 1,356,412   
  

 

 

   

 

 

 

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

At April 27, 2012, there were no direct borrowings under the Credit Agreement. Outstanding letters of credit issued under the Credit Agreement, which reduce availability under the $700.0 million credit limit, totaled $259.4 million. At April 27, 2012, there was $440.6 million available for borrowings under the Credit Agreement.

 

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

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

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

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

 

7. Share-Based Compensation

We recognized total share-based compensation expense for the quarter ended April 27, 2012 and April 29, 2011 of approximately $7.2 million and $6.1 million, respectively. We recognized total share-based compensation expense for the six months ended April 27, 2012 and April 29, 2011 of approximately $14.4 million and $12.2 million, respectively.

 

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8. Retiree Benefits

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

 

     Pension Benefits
Quarter Ended
    Postretirement Benefits
Quarter Ended
 

(in thousands)

   April 27,
2012
    April 29,
2011
    April 27,
2012
    April 29,
2011
 

Service cost

   $ 5,062      $ 5,135      $ 250      $ 285   

Interest cost

     20,056        21,191        363        406   

Expected return on assets

     (24,777     (22,830     (90     (93

Amortization of:

        

Prior service cost

     292        344        13        12   

Actuarial loss (gain)

     4,749        8,787        (299     (384

Curtailment loss

     1,077        —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net periodic benefit cost

   $ 6,459      $ 12,627      $ 237      $ 226   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

     Pension Benefits
Six Months Ended
    Postretirement Benefits
Six Months Ended
 

(in thousands)

   April 27,
2012
    April 29,
2011
    April 27,
2012
    April 29,
2011
 

Service cost

   $ 10,475      $ 10,270      $ 500      $ 570   

Interest cost

     41,243        42,382        726        812   

Expected return on assets

     (49,200     (45,715     (180     (184

Amortization of:

        

Prior service cost

     653        688        26        24   

Actuarial loss (gain)

     16,832        17,574        (598     (768

Curtailment loss

     1,077        —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net periodic benefit cost

   $ 21,080      $ 25,199      $ 474      $ 454   
  

 

 

   

 

 

   

 

 

   

 

 

 

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

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

 

9. Derivatives

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

 

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We are exposed to certain foreign currency risks in the normal course of our global business operations. For derivative contracts that are designated and qualify for a cash flow hedge, the effective portion of the gain or loss of the derivative contract is recorded as a component of other comprehensive income, net of tax. This amount is reclassified into the income statement on the line associated with the underlying transaction for the period(s) in which the hedged transaction affects earnings. The amounts recorded in accumulated other comprehensive income for existing cash flow hedges are generally expected to be reclassified into earnings within one year and all of the existing hedges will be reclassified into earnings by April 2014. Ineffectiveness related to these derivative contracts was recorded in the Condensed Consolidated Statement of Income as a gain of $0.4 million and $0.3 million for the quarters ended April 27, 2012 and April 29, 2011, respectively. Ineffectiveness related to these derivative contracts was recorded in the Condensed Consolidated Statement of Income as a gain of $1.6 million and $0.3 million for the six months ended April 27, 2012 and April 29, 2011, respectively.

For derivative contracts that are designated and qualify as a fair value hedge, gain or loss is recorded in the Condensed Consolidated Statement of Income under the heading Cost of Sales. For the quarters ended April 27, 2012 and April 29, 2011, we recorded a $2.3 million loss and a $1.7 million gain, respectively, in the Condensed Consolidated Statement of Income related to fair value hedges which was offset by foreign exchange fluctuations of the underlying receivables. For the six months ended April 27, 2012 and April 29, 2011, we recorded a $3.2 million loss and a $1.5 million gain, respectively, in the Condensed Consolidated Statement of Income related to fair value hedges which was offset by foreign exchange fluctuations of the underlying receivables.

For derivative contracts that are not designated as a fair value hedge or a cash flow hedge the gain or loss is recorded in the Condensed Consolidated Statement of Income under the heading Cost of Sales. For the quarter and six months ended April 27, 2012 we recorded a $1.1 million gain in the Condensed Consolidated Statement of Income related to undesignated hedges which was offset by foreign exchange fluctuations.

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

 

(in thousands)

   Effective Portion  
     Amount of Gain/(Loss)    

Gain/(Loss) Reclassified from AOCI into Earnings

 

Derivative Hedging Relationship

   Recognized in OCI    

Location

   Amount  

Foreign currency forward contracts

  

Quarter ended April 27, 2012

   $ (1,076   Cost of sales    $ 1,307   
     Sales      193   

Six months ended April 27, 2012

   $ 658      Cost of sales    $ 2,107   
     Sales      (41

Quarter ended April 29, 2011

   $ 4,978      Cost of sales    $ 3,766   
     Sales      644   

Six months ended April 29, 2011

   $ 6,446      Cost of sales    $ 2,944   
     Sales      3,583   

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

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

 

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10. Equity and Noncontrolling Interest

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

 

     Quarter Ended April 27, 2012     Quarter Ended April 29, 2011  
     Equity
Attributable
to Joy

Global Inc.
    Equity
Attributable to
Noncontrolling
Interests
    Total
Equity
    Equity
Attributable
to Joy

Global Inc.
    Equity
Attributable to
Noncontrolling
Interests
     Total
Equity
 

Beginning balance

   $ 2,111,034      $ 430,652      $ 2,541,686      $ 1,504,298      $ —         $ 1,504,298   

Comprehensive income (loss):

             

Net income

     213,588        33        213,621        161,972        —           161,972   

Change in pension liability, net of taxes

     12,592        —          12,592        5,886        —           5,886   

Derivative instrument fair market value adjustment, net of taxes

     (1,677     —          (1,677     371        —           371   

Currency translation adjustment

     936        4        940        47,179        —           47,179   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total comprehensive income:

     225,439        37        225,476        215,408        —           215,408   

Other changes in equity:

             

Cash dividends

     (18,512     —          (18,512     (18,355     —           (18,355

Purchase of IMM shares from noncontrolling interest

     —          (414,302     (414,302     —          —           —     

Other, including share based payment awards and options exercised

     10,188        —          10,188        20,768        —           20,768   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Ending balance

   $ 2,328,149      $ 16,387      $ 2,344,536      $ 1,722,119      $ —         $ 1,722,119   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

 

     Six Months Ended April 27, 2012     Six Months Ended April 29, 2011  
     Equity
Attributable
to Joy

Global Inc.
    Equity
Attributable to
Noncontrolling
Interests
    Total
Equity
    Equity
Attributable
to Joy

Global Inc.
    Equity
Attributable to
Noncontrolling
Interests
     Total
Equity
 

Beginning balance

   $ 1,951,795      $ —        $ 1,951,795      $ 1,342,366      $ —         $ 1,342,366   

Acquisition of controlling interest in IMM

     —          437,654        437,654        —          —           —     

Comprehensive income (loss):

             

Net income

     355,940        142        356,082        264,204        —           264,204   

Change in pension liability, net of taxes

     21,311        —          21,311        11,772        —           11,772   

Derivative instrument fair market value adjustment, net of taxes

     (917     —          (917     (51     —           (51

Currency translation adjustment

     8,252        4        8,256        51,832        —           51,832   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total comprehensive income:

     384,586        146        384,732        327,757        —           327,757   

Other changes in equity:

             

Cash dividends

     (36,909     —          (36,909     (36,488     —           (36,488

Purchase of IMM shares from noncontrolling interest

     —          (421,413     (421,413     —          —           —     

Other, including share based payment awards and options exercised

     28,677        —          28,677        88,484        —           88,484   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Ending balance

   $ 2,328,149      $ 16,387      $ 2,344,536      $ 1,722,119      $ —         $ 1,722,119   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

 

11. Basic and Diluted Net Income Per Share

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

 

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

 

     Quarter Ended      Six Months Ended  

(in thousands except per share data)

   April 27,
2012
    April 29,
2011
     April 27,
2012
    April 29,
2011
 

Numerator:

         

Income from continuing operations available to common shareholders

   $ 217,919      $ 161,972       $ 360,329      $ 264,204   

Loss from discontinued operations available to common shareholders

     (4,331     —           (4,389     —     
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income available to common shareholders

   $ 213,588      $ 161,972       $ 355,940      $ 264,204   
  

 

 

   

 

 

    

 

 

   

 

 

 

Denominator:

         

Denominator for basic net income per share - Weighted average shares

     105,951        105,048         105,678        104,603   

Effect of dilutive securities:

         

Stock options, restricted stock units and performance shares

     1,032        1,598         1,190        1,742   
  

 

 

   

 

 

    

 

 

   

 

 

 

Denominator for diluted net income per share - Adjusted weighted average shares and assumed conversions

     106,983        106,646         106,868        106,345   
  

 

 

   

 

 

    

 

 

   

 

 

 

Basic earnings (loss) per share:

         

Continuing operations

   $ 2.06      $ 1.54       $ 3.41      $ 2.53   

Discontinued operations

     (0.04     —           (0.04     —     
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 2.02      $ 1.54       $ 3.37      $ 2.53   
  

 

 

   

 

 

    

 

 

   

 

 

 

Diluted earnings (loss) per share:

         

Continuing operations

   $ 2.04      $ 1.52       $ 3.37      $ 2.48   

Discontinued operations

     (0.04     —           (0.04     —     
  

 

 

   

 

 

    

 

 

   

 

 

 

Net income

   $ 2.00      $ 1.52       $ 3.33      $ 2.48   
  

 

 

   

 

 

    

 

 

   

 

 

 

 

12. Fair Value Measurements

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

Level 1: Quoted prices in active markets for identical instruments

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

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

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

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

 

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Table of Contents

Fair Value Measurements

at April 27, 2012

 

(in thousands)

   Carrying
Value
     Total Fair
Value
     Level 1      Level 2  

Current Assets

           

Cash and cash equivalents

   $ 390,977       $ 390,977       $ 390,977       $ —     

Cash held in escrow

   $ 16,300       $ 16,300       $ 16,300       $ —     

Other Current Assets

           

Derivatives

   $ 7,381       $ 7,381       $ —         $ 7,381   

Other Accrued Liabilities

           

Derivatives

   $ 11,356       $ 11,356       $ —         $ 11,356   

Long-term Obligations Including Amounts due within One Year

  

Term Loan due 2016

   $ 481,250       $ 544,450       $ —         $ 544,450   

Further Term Loan due 2016

   $ 247,188       $ 290,663       $ —         $ 290,663   

6.0 % Senior Notes due 2016

   $ 248,181       $ 287,235       $ 287,235       $ —     

6.625% Senior Notes due 2036

   $ 148,453       $ 167,133       $ 167,133       $ —     

5.125% Senior Notes due 2021

   $ 495,919       $ 560,405       $ 560,405       $ —     

Fair Value Measurements

at October 28, 2011

 

(in thousands)

   Carrying
Value
     Total Fair
Value
     Level 1      Level 2  

Current Assets

           

Cash and cash equivalents

   $ 288,321       $ 288,321       $ 288,321       $ —     

Cash held in escrow

   $ 866,000       $ 866,000       $ 866,000       $ —     

Other Current Assets

           

Derivatives

   $ 8,904       $ 8,904       $ —         $ 8,904   

Other Long-term Assets

           

Investment in unconsolidated affiliate

   $ 380,114       $ 371,802       $ 371,802       $ —     

Other Accrued Liabilities

           

Derivatives

   $ 4,004       $ 4,004       $ —         $ 4,004   

Long-term Obligations Including Amounts due within One Year

  

6.0 % Senior Notes due 2106

   $ 248,008       $ 281,878       $ 281,878       $ —     

6.625% Senior Notes due 2036

   $ 148,441       $ 164,504       $ 164,504       $ —     

Term Loan due 2016

   $ 493,750       $ 486,949       $ —         $ 486,949   

5.125% Senior Notes due 2021

   $ 495,755       $ 536,350       $ 536,350       $ —     

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

 

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

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

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

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

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

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

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

 

13. Contingent Liabilities

We and our subsidiaries are involved in various unresolved legal matters that arise in the normal course of operations, the most prevalent of which relate to product liability (including over 1,000 asbestos and silica-related cases), employment, and commercial matters. Also, as a normal part of operations, our subsidiaries undertake contractual obligations, warranties, and guarantees in connection with the sale of products or services. Although the outcome of these matters cannot be predicted with certainty and favorable or unfavorable resolutions may affect the results of operations on a quarter-to-quarter basis, we believe that the outcome of such legal and other matters will not have a materially adverse effect on our consolidated financial position, results of operations, or liquidity.

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

On April 27, 2012, we were contingently liable to banks, financial institutions, and others for approximately $283.6 million for outstanding letters of credit, bank guarantees, and surety bonds securing performance of sales contracts and other guarantees in the ordinary course of business. Of the $283.6 million, approximately $16.9 million relates to surety bonds and $9.2 million relates to outstanding letters of credit or other guarantees issued by non-U.S. banks for non-U.S. subsidiaries under locally provided credit facilities.

 

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

 

14. Segment Information

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

 

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Table of Contents

 

In thousands

   Underground
Mining
Machinery
     Surface
Mining
Equipment
     Corporate     Eliminations     Total  

Quarter ended April 27, 2012

            

Net sales

   $ 886,552       $ 692,345       $ —        $ (37,837   $ 1,541,060   

Operating income (loss)

     201,920         155,619         (15,709     (8,393     333,437   

Interest and reorganization items

     —           —           (17,120     —          (17,120
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes

   $ 201,920       $ 155,619       $ (32,829   $ (8,393   $ 316,317   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Depreciation and amortization

   $ 36,240       $ 16,641       $ 684      $ —        $ 53,565   

Capital expenditures

   $ 35,094       $ 28,083       $ 1,480      $ —        $ 64,657   

Total assets

   $ 3,872,827       $ 2,147,055       $ 202,707      $ —        $ 6,222,589   

Quarter ended April 29, 2011

            

Net sales

   $ 648,364       $ 439,977       $ —        $ (25,612   $ 1,062,729   

Operating income (loss)

     154,999         101,028         (15,442     (6,523     234,062   

Interest and reorganization items

     —           —           (3,182     —          (3,182
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

   $ 154,999       $ 101,028       $ (18,624   $ (6,523   $ 230,880   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Depreciation and amortization

   $ 9,963       $ 5,764       $ 59      $ —        $ 15,786   

Capital expenditures

   $ 11,110       $ 13,586       $ —        $ —        $ 24,696   

Total assets

   $ 2,034,946       $ 1,015,042       $ 766,388      $ —        $ 3,816,376   

Six Months ended April 27, 2012

            

Net sales

   $ 1,525,855       $ 1,224,651       $ —        $ (73,245   $ 2,677,261   

Operating income (loss)

     333,428         252,829         (22,568     (16,506     547,183   

Interest and reorganization items

     —           —           (33,197     —          (33,197
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes

   $ 333,428       $ 252,829       $ (55,765   $ (16,506   $ 513,986   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Depreciation and amortization

   $ 46,215       $ 33,398       $ 731      $ —        $ 80,344   

Capital expenditures

   $ 51,020       $ 59,991       $ 3,081      $ —        $ 114,092   

Total assets

   $ 3,872,827       $ 2,147,055       $ 202,707      $ —        $ 6,222,589   

Six Months ended April 29, 2011

            

Net sales

   $ 1,159,302       $ 825,820       $ —        $ (52,861   $ 1,932,261   

Operating income (loss)

     250,370         176,913         (26,156     (13,267     387,860   

Interest and reorganization items

     —           —           (7,603     —          (7,603
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

   $ 250,370       $ 176,913       $ (33,759   $ (13,267   $ 380,257   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Depreciation and amortization

   $ 20,151       $ 11,381       $ 116      $ —        $ 31,648   

Capital expenditures

   $ 30,813       $ 22,285       $ —        $ —        $ 53,098   

Total assets

   $ 2,034,946       $ 1,015,042       $ 766,388      $ —        $ 3,816,376   

 

15. Recent Accounting Pronouncements

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

 

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Table of Contents

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

 

16. Subsidiary Guarantors

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

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

 

20


Table of Contents

Condensed Consolidating Statement of Income

Quarter Ended April 27, 2012

(In thousands)

 

       Parent
Company
    Subsidiary
Guarantors
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Net sales

   $ —        $ 864,474      $ 1,023,405      $ (346,819   $ 1,541,060   

Cost of sales

     —          589,484        724,402        (283,197     1,030,689   

Product development, selling and administrative expenses

     15,664        85,933        80,436        —          182,033   

Other (income) expense

     —          4,276        (9,375     —          (5,099
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (15,664     184,781        227,942        (63,622     333,437   

Intercompany items

     17,770        (16,943     (21,378     20,551        —     

Interest income (expense) - net

     (17,839     62        657        —          (17,120

Reorganization items

     —          —          —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes and equity

     (15,733     167,900        207,221        (43,071     316,317   

Provision (benefit) for income taxes

     (19,890     85,957        32,298        —          98,365   

Equity in income (loss) of subsidiaries

     213,795        113,919        —          (327,714     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

     217,952        195,862        174,923        (370,785     217,952   

Income from continuing operations attributable to non-controlling interest

     (33     —          (33     33        (33
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations attributable to Joy Global Inc.

   $ 217,919      $ 195,862      $ 174,890      $ (370,752   $ 217,919   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents

Condensed Consolidating Statement of Income

Quarter Ended April 29, 2011

(In thousands)

 

       Parent
Company
    Subsidiary
Guarantors
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Net sales

   $ —        $ 700,775      $ 644,627      $ (282,673   $ 1,062,729   

Cost of sales

     —          470,381        436,296        (216,819     689,858   

Product development, selling and administrative expenses

     14,970        70,916        55,644        —          141,530   

Other (income) expense

     —          15,971        (18,692     —          (2,721
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (14,970     143,507        171,379        (65,854     234,062   

Intercompany items

     14,602        (12,436     (31,914     29,748        —     

Interest income (expense) - net

     (7,467     889        3,396        —          (3,182

Reorganization items

     —          —          —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes and equity

     (7,835     131,960        142,861        (36,106     230,880   

Provision (benefit) for income taxes

     (15,548     47,074        37,382        —          68,908   

Equity in income (loss) of subsidiaries

     154,259        64,285        —          (218,544     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

   $ 161,972      $ 149,171      $ 105,479      $ (254,650   $ 161,972   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents

Condensed Consolidating Statement of Income

Six Months Ended April 27, 2012

(In thousands)

 

     Parent
Company
    Subsidiary
Guarantors
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Net sales

   $ —        $ 1,572,717      $ 1,775,349      $ (670,805   $ 2,677,261   

Cost of sales

     —          1,078,833        1,262,291        (537,659     1,803,465   

Product development, selling and administrative expenses

     42,659        168,636        142,094        —          353,389   

Other (income) expense

     —          12,140        (38,916     —          (26,776
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (42,659     313,108        409,880        (133,146     547,183   

Intercompany items

     32,493        (24,378     (54,131     46,016        —     

Interest income (expense) - net

     (34,532     164        1,171        —          (33,197

Reorganization items

     —          —          —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes and equity

     (44,698     288,894        356,920        (87,130     513,986   

Provision (benefit) for income taxes

     (33,132     133,324        53,323        —          153,515   

Equity in income (loss) of subsidiaries

     372,037        171,482        —          (543,519     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

     360,471        327,052        303,597        (630,649     360,471   

Income from continuing operations attributable to non-controlling interest

     (142     —          (142     142        (142
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations attributable to Joy Global Inc.

   $ 360,329      $ 327,052      $ 303,455      $ (630,507   $ 360,329   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents

Condensed Consolidating Statement of Income

Six Months Ended April 29, 2011

(In thousands)

 

     Parent
Company
    Subsidiary
Guarantors
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Net sales

   $ —        $ 1,232,915      $ 1,162,829      $ (463,483   $ 1,932,261   

Cost of sales

     —          828,916        805,128        (360,055     1,273,989   

Product development, selling and administrative expenses

     25,658        134,925        113,077        —          273,660   

Other (income) expense

     —          35,084        (38,332     —          (3,248
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (25,658     233,990        282,956        (103,428     387,860   

Intercompany items

     26,236        (26,866     (48,127     48,757        —     

Interest income (expense) - net

     (14,950     1,759        5,623        —          (7,568

Reorganization items

     (35     —          —          —          (35
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes and equity

     (14,407     208,883        240,452        (54,671     380,257   

Provision (benefit) for income taxes

     (22,378     80,922        57,509        —          116,053   

Equity in income (loss) of subsidiaries

     256,233        110,937        —          (367,170     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

   $ 264,204      $ 238,898      $ 182,943      $ (421,841   $ 264,204   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Condensed Consolidating Balance Sheets:

As of April 27, 2012

(In thousands)

 

     Parent
Company
    Subsidiary
Guarantors
     Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

ASSETS

           

Current assets

   $ 162,539      $ 1,339,486       $ 2,046,162      $ (261,262   $ 3,286,925   

Property, plant and equipment-net

     10,053        356,050         377,481        —          743,584   

Intangible assets-net

     —          840,801         1,140,437        —          1,981,238   

Other assets

     4,027,705        2,165,050         1,717,892        (7,699,805     210,842   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total assets

   $ 4,200,297      $ 4,701,387       $ 5,281,972      $ (7,961,067   $ 6,222,589   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

           

Current liabilities

   $ 69,165      $ 914,186       $ 1,071,540      $ (122,886   $ 1,932,005   

Current liabilities of discontinued operation

     —          50,681         (27,309     —          23,372   

Long-term debt

     1,555,678        1,428         35        —          1,557,141   

Accrued pension costs

     231,053        6,922         6,999        —          244,974   

Other non-current liabilities

     (135     11,465         109,231        —          120,561   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total liabilities

     1,855,761        984,682         1,160,496        (122,886     3,878,053   

Shareholders’ equity attributable to Joy Global Inc.

     2,344,536        3,716,705         4,105,089        (7,838,181     2,328,149   

Noncontrolling interest

     —          —           16,387        —          16,387   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total equity

     2,344,536        3,716,705         4,121,476        (7,838,181     2,344,536   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 4,200,297      $ 4,701,387       $ 5,281,972      $ (7,961,067   $ 6,222,589   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

 

24


Table of Contents

As of October 28, 2011

(In thousands)

 

     Parent
Company
     Subsidiary
Guarantors
     Non-Guarantor
Subsidiaries
     Eliminations     Consolidated  

ASSETS

             

Current assets

   $ 1,053,875       $ 1,224,326       $ 1,508,026       $ (222,220   $ 3,564,007   

Property, plant and equipment-net

     1,530         324,505         213,536         —          539,571   

Intangible assets-net

     —           792,972         20,947         —          813,919   

Other assets

     2,632,946         1,966,826         1,182,149         (5,273,064     508,857   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total assets

   $ 3,688,351       $ 4,308,629       $ 2,924,658       $ (5,495,284   $ 5,426,354   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

             

Current liabilities

   $ 61,269       $ 909,006       $ 854,915       $ (100,619   $ 1,724,571   

Long-term debt

     1,354,704         1,638         70         —          1,356,412   

Accrued pension costs

     318,173         6,950         7,329         —          332,452   

Other non-current liabilities

     2,410         9,373         49,341         —          61,124   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities

     1,736,556         926,967         911,655         (100,619     3,474,559   

Shareholders’ equity attributable to Joy Global Inc.

     1,951,795         3,381,662         2,013,003         (5,394,665     1,951,795   

Noncontrolling interest

     —           —           —           —          —     
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total equity

     1,951,795         3,381,662         2,013,003         (5,394,665     1,951,795   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 3,688,351       $ 4,308,629       $  2,924,658       $ (5,495,284   $ 5,426,354   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Condensed Consolidating Statement of Cash Flows:

Six Months Ended April 27, 2012

(In thousands)

 

     Parent
Company
    Subsidiary
Guarantors
    Non-Guarantor
Subsidiaries
    Consolidated  

Net cash provided (used) by operating activities – continuing operations

   $ (60,722   $ 75,409      $ 81,760      $ 96,447   

Net cash used by operating activities – discontinued operations

     —          (10,158     —          (10,158
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided (used) by operating activities

     (60,722     65,251        81,760        86,289   

Investing Activities:

        

Acquisition of controlling interest in IMM, net of cash acquired

     (1,012,361     —          72,912        (939,449

Withdrawal of cash held in escrow

     849,700        —          —          849,700   

Other

     (3,166     (65,591     (43,786     (112,543
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided (used) by investing activities – continuing operations

     (165,827     (65,591     29,126        (202,292

Net cash used by investing activities – discontinued operations

     —          —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided (used) by investing activities

     (165,827     (65,591     29,126        (202,292
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by financing activities – continuing operations

     226,659        (199     (4,773     221,687   

Net cash used by financing activities – discontinued operations

     —          —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided (used) by financing activities

     226,659        (199     (4,773     221,687   
  

 

 

   

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     —          —          (3,028     (3,028
  

 

 

   

 

 

   

 

 

   

 

 

 

Increase (decrease) in cash and cash equivalents

     110        (539     103,085        102,656   

Cash and cash equivalents at beginning of period

     100,181        16,152        171,988        288,321   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 100,291      $ 15,613      $ 275,073      $ 390,977   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents

Six Months Ended April 29, 2011

(In thousands)

 

     Parent
Company
    Subsidiary
Guarantors
    Non-Guarantor
Subsidiaries
    Consolidated  

Net cash provided by operating activities

   $ 146,764      $ 21,692      $ 81,379      $ 249,835   

Net cash used by investing activities

     (184     (33,090     (19,660     (52,934

Financing Activities:

        

Share-based payment awards

     67,617        —          —          67,617   

Other

     (36,623     —          3,151        (33,472
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by financing activities

     30,994        —          3,151        34,145   
  

 

 

   

 

 

   

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     —          —          24,514        24,514   
  

 

 

   

 

 

   

 

 

   

 

 

 

Increase (decrease) in cash and cash equivalents

     177,574        (11,398     89,384        255,560   

Cash and cash equivalents at beginning of period

     439,295        16,262        360,024        815,581   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 616,869      $ 4,864      $ 449,408      $ 1,071,141   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

17. Supplemental Subsidiary Guarantors

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

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

 

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Condensed Consolidating Statement of Income

Quarter Ended April 27, 2012

(In thousands)

 

     Parent
Company
    Supplemental
Subsidiary
Guarantors
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Net sales

   $ —        $ 837,708      $ 1,050,171      $ (346,819   $ 1,541,060   

Cost of sales

     —          570,244        743,642        (283,197     1,030,689   

Product development, selling and administrative expenses

     15,664        82,216        84,153        —          182,033   

Other (income) expense

     —          4,395        (9,494     —          (5,099
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (15,664     180,853        231,870        (63,622     333,437   

Intercompany items

     17,770        (16,943     (21,378     20,551        —     

Interest income (expense) - net

     (17,839     69        650        —          (17,120

Reorganization items

     —          —          —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes and equity

     (15,733     163,979        211,142        (43,071     316,317   

Provision (benefit) for income taxes

     (19,890     85,957        32,298        —          98,365   

Equity in income (loss) of subsidiaries

     213,795        117,840        —          (331,635     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

     217,952        195,862        178,844        (374,706     217,952   

Income from continuing operations attributable to non-controlling interest

     (33     —          (33     33        (33
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations attributable to Joy Global Inc.

   $  217,919      $ 195,862      $ 178,811      $ (374,673   $ 217,919   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Table of Contents

Condensed Consolidating Statement of Income

Six Months Ended April 27, 2012

(In thousands)

 

     Parent
Company
    Supplemental
Subsidiary
Guarantors
    Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

Net sales

   $ —        $ 1,545,951      $ 1,802,115      $ (670,805   $ 2,677,261   

Cost of sales

     —          1,059,593        1,281,531        (537,659     1,803,465   

Product development, selling and administrative expenses

     42,659        164,919        145,811        —          353,389   

Other (income) expense

     —          12,259        (39,035     —          (26,776
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (42,659     309,180        413,808        (133,146     547,183   

Intercompany items

     32,493        (24,378     (54,131     46,016        —     

Interest income (expense) - net

     (34,532     171        1,164        —          (33,197

Reorganization items

     —          —          —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from continuing operations before income taxes and equity

     (44,698     284,973        360,841        (87,130     513,986   

Provision (benefit) for income taxes

     (33,132     133,324        53,323        —          153,515   

Equity in income (loss) of subsidiaries

     372,037        175,403        —          (547,440     —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

     360,471        327,052        307,518        (634,570     360,471   

Income from continuing operations attributable to non-controlling interest

     (142     —          (142     142        (142
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations attributable to Joy Global Inc.

   $  360,329      $ 327,052      $ 307,376      $ (634,428   $ 360,329   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

28


Table of Contents

Condensed Consolidating Balance Sheets:

As of April 27, 2012

(In thousands)

 

     Parent
Company
    Supplemental
Subsidiary
Guarantors
     Non-Guarantor
Subsidiaries
    Eliminations     Consolidated  

ASSETS

           

Current assets

   $ 162,539      $ 1,294,472       $ 2,091,176      $ (261,262   $ 3,286,925   

Property, plant and equipment-net

     10,053        348,801         384,730        —          743,584   

Intangible assets-net

     —          840,801         1,140,437        —          1,981,238   

Other assets

     4,027,705        2,164,264         1,718,678        (7,699,805     210,842   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total assets

   $ 4,200,297      $ 4,648,338       $ 5,335,021      $ (7,961,067   $ 6,222,589   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

           

Current liabilities

   $ 69,165      $ 909,718       $ 1,076,008      $ (122,886   $ 1,932,005   

Current liabilities of discontinued operation

     —          50,681         (27,309     —          23,372   

Long-term debt

     1,555,678        1,428         35        —          1,557,141   

Accrued pension costs

     231,053        6,922         6,999        —          244,974   

Other non-current liabilities

     (135     11,545         109,151        —          120,561   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total liabilities

     1,855,761        980,294         1,164,884        (122,886     3,878,053   

Shareholders’ equity attributable to Joy Global Inc.

     2,344,536        3,668,044         4,153,750        (7,838,181     2,328,149   

Noncontrolling Interest

     —          —           16,387        —          16,387   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total equity

     2,344,536        3,668,044         4,170,137        (7,838,181     2,344,536   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 4,200,297      $ 4,648,338       $ 5,335,021      $ (7,961,067   $ 6,222,589   
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

As of October 28, 2011

(In thousands)

 

     Parent
Company
     Supplemental
Subsidiary
Guarantors
     Non-Guarantor
Subsidiaries
     Eliminations     Consolidated  

ASSETS

             

Current assets

   $ 1,053,875       $ 1,180,749       $ 1,551,603       $ (222,220   $ 3,564,007   

Property, plant and equipment-net

     1,530         316,377         221,664         —          539,571   

Intangible assets-net

     —           792,972         20,947         —          813,919   

Other assets

     2,632,946         1,966,826         1,182,149         (5,273,064     508,857   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total assets

   $ 3,688,351       $ 4,256,924       $ 2,976,363       $ (5,495,284   $ 5,426,354   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

             

Current liabilities

   $ 61,269       $ 900,871       $ 863,050       $ (100,619   $ 1,724,571   

Long-term debt

     1,354,704         1,638         70         —          1,356,412   

Accrued pension costs

     318,173         6,950