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

FORM 10-Q

(MARK ONE)

[  X  ]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED        August 3, 2002      

OR

[       ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD from                       to                      

Commission File number 1-9299

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

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

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

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

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

JOY GLOBAL INC.

FORM 10-Q -- INDEX
August 3, 2002

PART I. - FINANCIAL INFORMATION

Item 1.   Financial Statements

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

See accompanying notes to condensed consolidated financial statements

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

See accompanying notes to condensed consolidated financial statements

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

See accompanying notes to condensed consolidated financial statements

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

See accompanying notes to condensed consolidated financial statements

JOY GLOBAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
August 3, 2002
(Unaudited)

1. Basis of Presentation

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

Joy Global Inc. (the "Company", the "Successor Company", "we", "us" and "our") was known as Harnischfeger Industries, Inc. (the "Predecessor Company") prior to July 12, 2001 (the "Effective Date"). On June 7, 1999 the Predecessor Company and substantially all of its domestic operating subsidiaries filed voluntary petitions for reorganization under the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). By order dated May 29, 2001, the Bankruptcy Court confirmed our Plan of Reorganization (the "POR") and we formally emerged from bankruptcy on the Effective Date.

Upon emergence from bankruptcy, we adopted the principles of fresh start accounting set forth in the American Institute of Certified Public Accountants Statement of Position No. 90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code" ("SOP 90-7"). As a result of the application of fresh start accounting at June 23, 2001, the Successor Company's financial statements are not comparable to those of the Predecessor Company.

During the first quarter of fiscal 2002, we amended our by-laws to adopt a 52- or 53-week fiscal year and changed our fiscal year-end date from October 31 to the Saturday nearest October 31. Beginning with the first quarter of fiscal 2002, each of our fiscal quarters consists of 13 weeks, except for any fiscal years consisting of 53 weeks that will add one week to the first quarter. This change did not have a material effect on our revenue or results of operations for the third quarter of fiscal 2002.

The following table describes the periods presented in the financial statements, accompanying notes and Management's Discussion and Analysis of Financial Condition and Results of Operations:

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

These financial statements should be read in conjunction with the financial statements and the accompanying notes in our annual report on Form 10-K for the fiscal year ended October 31, 2001. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States 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.

2. Borrowings and Credit Facilities

Our Credit Agreement with Deutsche Bank Trust Company Americas (the "Credit Agreement") provides for a $250 million revolving loan facility that matures on October 31, 2005. Borrowings under the Credit Agreement are limited by a borrowing base. At the end of the 2002 Third Quarter, the borrowing base exceeded the requirements to support the full $250 million facility. Outstanding borrowings bear interest equal to either LIBOR plus the applicable margin (2.25% to 3.25%), or the Base Rate (as defined in the Credit Agreement) plus the applicable margin (1.25% to 2.25%) at our option depending on certain of our financial ratios. We pay a commitment fee ranging from 0.5% to 0.75% on the unused portion of the Credit Agreement. Substantially all assets of the Company and its subsidiaries are pledged as collateral under the Credit Agreement.

On March 18, 2002 we completed the offering of $200.0 million aggregate principal amount of 8.75% Senior Subordinated Notes due March 15, 2012. We used approximately $100.5 million of the net proceeds of the offering to prepay the term loan and accrued interest then outstanding under the Credit Agreement. The balance of the net proceeds of the Senior Subordinated Notes offering, together with other company funds, was used to redeem our 10.75% Senior Notes due 2006. An extraordinary loss of $4.9 million, net of a tax benefit of $3.2 million, was incurred as a result of the early retirement of debt, consisting of $4.4 million of retirement premiums and the $3.7 million write-off of associated debt issuance costs related to the term loan. The Senior Subordinated Notes were initially privately placed under Rule 144A of the Securities Act of 1933 and were exchanged for registered notes in June 2002.

The Credit Agreement contains restrictions and financial covenants relating to interest coverage, leverage and EBITDA and limitations on the incurrence of additional indebtedness and liens, asset sales, and capital expenditures. The covenants in the indenture for the Senior Subordinated Notes are generally less restrictive than the covenants in the Credit Agreement and relate to, among other things, limitations on indebtedness and asset sales.

The Credit Agreement was amended as of June 25, 2002 to modify certain debt covenants and to clarify certain definitional and administrative items.

Based on our current expectations, our operating results for the balance of fiscal 2002 and for the first part of fiscal 2003 could fall below certain of the covenant levels in our amended Credit Agreement. If such an event were to occur, we would seek a further amendment to the Credit Agreement or waivers of the covenants. If an amendment or waiver were required and not received, the Credit Agreement lenders would be able to exercise default rights under the Credit Agreement. If the Credit Agreement lenders demanded repayment of Credit Agreement borrowings, the holders of our Senior Subordinated Notes could also demand repayment of the Senior Subordinated Notes. While we fully expect that we would receive any required amendments or waivers, no assurance of receipt can be given.

At August 3, 2002, outstanding borrowings under the Credit Agreement were $35.0 million and outstanding letters of credit issued under the Credit Agreement, which count toward the $250 million credit limit, totaled approximately $71.6 million. As of August 3, 2002, the borrowing base calculated in accordance with the Credit Agreement amounted to $304.8 million and accordingly there was $143.4 million available for additional borrowings and letters of credit under the Credit Agreement.

3. Shareholders' Equity

We have 150,000,000 shares of authorized common stock, par value $1.00 per share, 50,000,000 of which will ultimately be distributed in connection with our emergence from bankruptcy and are deemed outstanding for accounting purposes at the Effective Date. On July 31, 2001, we distributed 39,743,681 shares of common stock to holders of allowed pre-petition claims against the Predecessor Company. On January 31, 2002, we released our second distribution under the POR amounting to 3,168,612 shares of common stock. On July 25, 2002, we released our third distribution under the POR amounting to 3,214,632 shares of common stock. The third distribution was based on approximately $1.30 billion of "current adjusted claims" and, when combined with the initial distribution, equated one share of Joy Global Inc. common stock for each $25.95 of allowed claim.

Pursuant to an order of the Bankruptcy Court, on February 6, 2002, we issued 228,395 shares of common stock to an international investment banking firm which acted as financial advisor to the creditors committee in our bankruptcy. One of our directors is a Managing Director of the investment banking firm. These shares, together with the other distributions of common stock under the terms of the POR, bring the total number of shares distributed to date to 46,355,320. As of August 3, 2002, 3,873,075 shares are designated for future distribution under the POR and held in a disputed claims equity reserve pending resolution of certain remaining claims against the Predecessor Company.

Our Stock Incentive Plan authorizes the grant of up to 5,556,000 stock options, performance units and other stock-based awards to officers, employees and directors. Stock option grants of approximately 3.6 million shares were made to approximately 175 individuals on July 16, 2001, November 1, 2001, February 1, 2002 and May 1, 2002 with exercise prices of $13.76, $17.49, $17.49 and $16.09 respectively. The July 16, 2001 grant included grants of options to purchase 10,000 shares to each of the Company's six outside directors. In addition, options to purchase 5,000 shares were granted to each of the Company's six outside directors on February 27, 2002 with an exercise price of $15.84.

On July 15, 2002, the Board of Directors of Joy Global, Inc., declared a dividend of one preferred share purchase right for each outstanding share of common stock, par value $1.00 per share. Each right entitles the holder to purchase one one-hundredth of a share of our Series A Junior Participating Preferred Stock for $100. Under certain circumstances, if a person or group acquires 15% or more of our outstanding common stock, holders of the rights (other than the person or group triggering their exercise) will be able to purchase, in exchange for the $100 exercise price, shares of our common stock or of any company into which we are merged having a value of $200. The rights expire on August 5, 2012 unless extended by our Board of Directors. Because the rights may substantially dilute the stock ownership of a person or group attempting to take us over without the approval of our Board of Directors, our rights plan could make it more difficult for a third party to acquire us (or a significant percentage of our outstanding capital stock) without first negotiating with our Board of Directors regarding such acquisition. We have authorized 5,000,000 shares of preferred stock, par value $1.00 per share, of which none have been issued.

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

Options to purchase approximately 3.6 million shares of common stock that were outstanding at August 3, 2002 are not included in the computation of diluted earnings per share because the additional shares would reduce the loss per share and, therefore, would be anti-dilutive.

Per share and share information for the Predecessor Company for periods presented in the Condensed Consolidated Statements of Operations have been omitted as such information is deemed not to be meaningful.

4. Contingent Liabilities

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

The Company or its subsidiaries are also parties to litigation matters and claims that are normal in the course of their operations. Also, as a normal part of their operations, the Company's subsidiaries undertake certain 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 resolution may affect the results of operations on a quarter-to-quarter basis, we believe that such matters will not have a materially adverse effect on the Company's consolidated financial position, results of operations or liquidity.

With reference to specific contingent liabilities discussed in our annual report on Form 10-K for the year ended October 31, 2001, the complaint filed by the Beloit Liquidating Trust on November 21, 2001 seeking, among other things, the revocation of the confirmation order for the Plan of Reorganization was voluntarily dismissed by the Beloit Liquidating Trust. The complaint filed on June 5, 2001 by the Official Committee of Unsecured Creditors of Beloit Corporation (the “Beloit Committee”) against certain present and former officers of the Company was dismissed by the Milwaukee County Circuit Court and the Beloit Committee has appealed the dismissal. On March 29, 2002, the individual defendants in the suit filed by John G. Kling on November 9, 2001 against certain of the Company’s present and former employees, officers and directors, filed a motion to dismiss the matter.

5. Reorganization Plan Credits and Other, net

The following table displays reorganization plan credits and other items:

At the Effective Date, we held a note receivable from Beloit Corporation in the amount of $7.2 million. Due to the uncertainty as to the collectibility of this note, we reserved the entire $7.2 million. At February 2, 2002, we reduced this reserve to the then remaining outstanding balance of $2.2 million, creating a reorganization plan credit of $5.0 million in the first quarter of 2002. On February 15, 2002, the note was paid in full, the agreement under which the note was issued was terminated and the remaining $2.2 million reserve was recorded to the reorganization plan credit in the second quarter of fiscal 2002.

Other, net includes legal fees, professional fee settlements and a loss on the sale of a building related to pre-emergence activities, as well as a write-down of a note receivable related to a discontinued operation.

6. Income Taxes

On a consolidated basis, our effective income tax rate for the 2002 Nine Months was 38%. This rate is greater than the statutory rate of 35% primarily due to domestic state taxes and the effects of domestic and foreign tax rate differentials and mix of earnings.

7. Inventories

Consolidated inventories consisted of the following:

In connection with the implementation of fresh start accounting, we revalued our inventories on the Effective Date to their fair values (estimated selling prices less costs to complete, cost of disposal and a reasonable profit allowance), resulting in a $156 million increase in inventory values. Of this increase, $0.2 million and $53.6 million remained in inventory at August 3, 2002 and October 31, 2001, respectively.

8. Excess Reorganization Value and Intangible Assets

We adopted the Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets" upon implementation of fresh start accounting. Under SFAS No. 142, goodwill (excess reorganization value) is no longer subject to amortization, but instead is subject to an evaluation for impairment at least annually by applying a two-step fair-value-based test. Additionally, intangible assets with indefinite lives are no longer amortized but are subject to a fair-value-based test for impairment at least annually. Intangible assets with finite lives continue to be amortized. Also, in accordance with SFAS No. 142, we will perform our annual impairment tests during the fourth quarter of fiscal 2002.

As required by SFAS No. 142, the results of operations for periods prior to its adoption have been restated. The following table reconciles reported net income (loss) to pro forma net income (loss) that would have resulted for the 2001 Two Months and 2001 Eight Months if SFAS No. 142 had been adopted for those periods.

9. Segment Information

At August 3, 2002, we had two reportable segments, Underground Mining Machinery and Surface Mining Equipment. Operating income (loss) of the segments does not include interest income or expense and provision (benefit) for income taxes. There are no significant intersegment sales. Total continuing operations assets are those used in the segment's operations. Corporate assets consist primarily of deferred financing costs, cash, restricted cash, excess reorganization value and deferred tax assets.

Business Segment Information

(1) - Includes fresh start accounting charges of $4.7 million, $46.8 million and $7.7 million for Underground Mining Machinery and $2.3 million, $28.8 million and $2.3 million for Surface Mining Equipment for the 2002 Third Quarter, 2002 Nine Months and 2001 One Month, respectively.

Geographical Segment Information

(1) - Includes fresh start accounting charges of $4.2 million for the United States, $0.2 million for Europe and $2.6 million for Other Foreign for the 2002 Third Quarter, $55.6 million for the United States, $1.4 million for Europe and $18.6 million for Other Foreign for the 2002 Nine Months and $1.0 million for the United States, $4.4 million for Europe and $4.6 million for Other Foreign for the 2001 One Month.

10. Recent Accounting Pronouncements

In May 2002, FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13 and Technical Corrections as of April 2002". SFAS No. 145 rescinds FASB Statement No. 4, "Reporting Gains and Losses from Extinguishment of Debt", and an amendment of that Statement, FASB Statement No. 64, "Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements" and FASB Statement No. 44, "Accounting for Intangible Assets of Motor Carriers". SFAS No. 145 amends FASB Statement No. 13, "Accounting for Leases", to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects that are similar to sale-leaseback transactions. SFAS No. 145 also amends other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions. SFAS No. 145, in regards to FASB Statement No. 13, is effective for transactions occurring after May 15, 2002. All other provisions of SFAS No. 145 are effective for fiscal years beginning after May 15, 2002. We do not expect SFAS No. 145 to have a material effect on our consolidated financial position, results of operations or liquidity; however, upon adoption of SFAS No. 145, the extraordinary items in prior periods presented resulting from early retirement or discharge of debt will be reclassified.

In July 2002, FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities". SFAS No. 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. Examples of costs covered by the standard include lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, plant closing, or other exit or disposal activity. SFAS No. 146 is to be applied prospectively to exit or disposal activities initiated after December 31, 2002. We do not expect SFAS No. 146 to have a material effect on our consolidated financial position, results of operations or liquidity.

11. Subsidiary Guarantors

The following tables present condensed consolidated financial information for the 2002 Third Quarter, 2001 One Month, 2001 Two Months, 2002 Nine Months and 2001 Eight Months for: (a) the Company; (b) on a combined basis, the guarantors of the Credit Agreement and Senior Subordinated Notes, which include substantially all the domestic subsidiaries of the Company ("Subsidiary Guarantors"); and (c) on a combined basis, the non-guarantors, which include all of the foreign subsidiaries of the Company ("Non-Guarantor Subsidiaries").

Condensed Consolidated
Statement of Operations
(In thousands)

Condensed Consolidated
Statement of Operations
(In thousands)