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 May 1, 2004

[ ] 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)

Delaware (State of Incorporation)		39-1566457 (I.R.S. Employer Identification No.)
	100 East Wisconsin Ave, Suite 2780 Milwaukee, Wisconsin 53202 (Address of principal executive offices) (Zip Code) (414) 319-8500 (Registrant’s Telephone Number, Including Area Code)

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes [ X ] No [ ]

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

Indicate by check mark 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.

Class
Common Stock, $1 par value

Outstanding at May 18, 2004
51,078,136 shares

JOY GLOBAL INC.
FORM 10-Q
TABLE OF CONTENTS
May 1, 2004


PART I. - FINANCIAL INFORMATION		Page No.

Item 1 - Financial Statements (unaudited):

	Condensed Consolidated Statements of Operations - Three and Six Months Ended May 1, 2004 and May 3, 2003	3

	Condensed Consolidated Balance Sheets - May 1, 2004 and November 1, 2003	4

	Condensed Consolidated Statements of Cash Flows - Six Months Ended May 1, 2004 and May 3, 2003	5

	Notes to Condensed Consolidated Financial Statements	6 - 23

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations		24 - 31

Item 3 - Quantitative and Qualitative Disclosures About Market Risk		31

Item 4 - Controls and Procedures		31

PART II. - OTHER INFORMATION

Item 1 - Legal Proceedings		32

Item 2 - Changes in Securities and Use of Proceeds		32

Item 3 - Defaults Upon Senior Securities		32

Item 4 - Submission of Matters to a Vote of Security Holders		32

Item 5 - Other Information - Forward-Looking Statements and Cautionary Factors		32 - 33

Item 6 - Exhibits and Reports on Form 8-K		33 - 34

Signatures		35

PART I. - FINANCIAL INFORMATION

Table of Contents

Item 1. Financial Statements

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

	Three Months Ended				Six Months Ended
	May 1, 2004		May 3, 2003		May 1, 2004		May 3, 2003
Net sales	$ 337,682		$ 298,888		$ 621,368		$ 538,049
Costs and expenses:
Cost of sales	246,569		226,956		460,460		412,992
Product development, selling
and administrative expenses	69,445		60,112		132,188		115,708
Restructuring charges	69		991		502		2,168
Other income	(887	)	(224	)	(1,995	)	(590	)

Operating income (loss)	22,486		11,053		30,213		7,771
Interest expense, net	4,360		5,560		10,034		11,505

Income (loss) before reorganization items	18,126		5,493		20,179		(3,734	)
Reorganization items - (income) expense	(2,264	)	96		(1,649	)	96

Income (loss) before income taxes	20,390		5,397		21,828		(3,830	)

Provision (benefit) for income taxes	1,550		3,000		2,050		(700	)

Net income (loss)	$ 18,840		$ 2,397		$ 19,778		$ (3,130	)

Net income (loss) per share:
Basic	$ 0.36		$ 0.05		$0.38		$(0.06)

Diluted	$ 0.35		$ 0.05		$0.37		$(0.06)

Dividends per share	$ 0.075		$ --		$ 0.125		$ --

Weighted average shares outstanding:
Basic	52,179		50,228		51,566		50,228

Diluted	53,740		50,297		53,013		50,228

See accompanying notes to condensed consolidated financial statements

Table of Contents

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

	May 1, 2004		November 1, 2003
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	208,657	$	148,505
Accounts receivable, net		209,541		193,882
Inventories		420,483		382,929
Other current assets		45,847		51,251

Total current assets		884,528		776,567
Property, plant and equipment, net		212,717		226,101
Intangible assets, net		74,270		77,709
Deferred income taxes		145,652		136,192
Other assets		67,396		70,160

Total assets	$	1,384,563	$	1,286,729

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term notes payable, including current portion
of long-term debt	$	13,177	$	4,767
Trade accounts payable		99,776		89,136
Income taxes payable		20,744		26,097
Other accrued liabilities		248,491		205,706

Total current liabilities		382,188		325,706
Long-term debt		202,436		202,912
Accrued pension costs		310,307		313,214
Other		73,769		74,624

Total liabilities		968,700		916,456

Shareholders' equity		415,863		370,273

Total liabilities and shareholders' equity	$	1,384,563	$	1,286,729

See accompanying notes to condensed consolidated financial statements

Table of Contents

JOY GLOBAL INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(In thousands)

	Six Months Ended
	May 1, 2004		May 3, 2003
Net cash provided by operating activities	$ 26,226		$ 41,811
Investing activities:
Property, plant and equipment acquired	(5,714	)	(8,486	)
Proceeds from sale of property, plant and equipment	1,324		979
Purchase of equity interest in subsidiary	--		(12,316	)
Other, net	4,785		2,663

Net cash provided (used) by investing activities	395		(17,160	)

Financing activities:
Exercise of stock options	29,832		--
Dividends paid	(6,316	)	--
Financing fees	(1,000	)	(250	)
Net payments of long-term obligations	(761	)	(154	)
Increase in short-term notes payable, net	9,230		1,221

Net cash provided by financing activities	30,985		817

Effect of Exchange Rate Changes on Cash and
Cash Equivalents	2,546		7,100

Increase in Cash and Cash Equivalents	60,152		32,568
Cash and Cash Equivalents at Beginning of Period	148,505		70,906

Cash and Cash Equivalents at End of Period	$ 208,657		$ 103,474

See accompanying notes to condensed consolidated financial statements

Table of Contents

JOY GLOBAL INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
May 1, 2004
(Unaudited)

1. Description of Business

Joy Global Inc. manufactures and markets products classified into two business segments: underground mining machinery (Joy Mining Machinery or “Joy”) and surface mining equipment (P&H Mining Equipment or “P&H”). Joy is a major manufacturer of underground mining equipment for the extraction of coal and other bedded minerals and offers comprehensive service locations near major mining regions worldwide. P&H is a major producer of surface mining equipment for the extraction of ores and minerals and provides extensive operational support for many types of equipment used in surface mining.

2. Basis of Presentation

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

These financial statements should be read in conjunction with the financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended November 1, 2003. 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 generally accepted accounting principles 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.

3. Borrowings and Credit Facilities

On January 23, 2004, we entered into a second amended and restated credit agreement (“Credit Agreement”) which consists of a $200 million revolving credit facilty maturing on October 15, 2008. Substantially all of our assets and our domestic subsidiaries’assets, other than real estate, are pledged as collateral under the Credit Agreement. Outstanding borrowings bear interest equal to either LIBOR plus the applicable margin (3.25% to 2.00%) or the Base Rate (defined as the higher of the Prime Rate or the Federal Funds Effective Rate plus 0.50%) plus the applicable margin (2.25% to 1.00%) at our option depending on certain of our financial ratios. We pay a commitment fee ranging from 0.50% to 0.75% on the unused portion of the revolving credit facility. In fiscal 2002, we issued $200 million in 8.75% Senior Subordinated Notes due March 15, 2012.

Both the Credit Agreement and Senior Subordinated Note Indenture contain restrictions and financial covenants relating to, among other things, minimum financial performance and limitations on the incurrence of additional indebtedness, liens, asset sales, and capital expenditures. The covenants in the Senior Subordinated Note Indenture are generally less restrictive than the covenants in the Credit Agreement. Interest coverage, leverage and fixed charge coverage covenants in the Credit Agreement generally become more restrictive over the term of the agreement. At May 1, 2004, we were in compliance with financial covenants in the Credit Agreement and the Indenture.

At May 1, 2004, there were no outstanding borrowings under the Credit Agreement. Outstanding letters of credit issued under the Credit Agreement, which count toward the $200 million credit limit, totaled $63.6 million. The amount available for borrowings under the Credit Agreement is also limited by a borrowing base calculation. At May 1, 2004, there was $136.4 million available for borrowings under the Credit Agreement.

4. 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 July 12, 2001 (“Effective Date”) emergence from bankruptcy and are deemed outstanding for accounting purposes at the Effective Date. Under our Plan of Reorganization (“POR”), the 50,000,000 shares are being distributed to holders of allowed claims in the bankruptcy case. As of May 1, 2004, total distributions under the POR were 48,766,577 shares. The remaining 1,233,423 shares are held in a disputed claims equity reserve and will be distributed in accordance with the POR as the two remaining bankruptcy related claims are finally resolved.

Our stock incentive plan authorizes the grant of up to 8,056,000 stock options, performance units, restricted stock units and other stock-based awards to officers, employees and directors. As of May 1, 2004, stock option grants aggregating approximately 5.1 million shares of common stock had been made to approximately 250 individuals. Options to purchase 15,000 shares have also been granted to each of our six outside directors. On February 25, 2003, and February 24, 2004, restricted stock unit grants of 5,582 and 2,159, respectively, were made to each of our six outside directors. These restricted stock units vest one year after the grant date and provide that a number of shares of common stock equal to the number of vested units will be delivered one year after the director’s service on the board terminates. On January 21, 2004, grants of 47,465 restricted stock units were made to certain executive officers and key employees. These restricted stock units vest over a five-year period with one-third vesting on the third, fourth and fifth anniversaries of the grant date and provide that a number of shares of common stock equal to the number of vested units will be delivered to the individual as the units vest. Individuals are credited with additional units to reflect cash dividends paid on the underlying common stock. In the event of a change in control, the units will be paid out in cash based on the market price of the common stock as of the date of the change in control.

The 2001, 2003 and 2004 Performance Unit Award Programs under our stock incentive plan provide long-term incentive compensation opportunities to certain senior executives. Up to approximately 818,000 shares of common stock may be earned by the senior executives under the 2001, 2003 and 2004 Performance Unit Award Programs if, at the end of a three and one quarter year award cycle, for the 2001 Performance Unit Awards, or at the end of a three year award cycle, for the 2003 and 2004 Performance Unit Awards, cumulative net cash flow, as defined in the performance award agreements, exceeds certain threshold amounts. Each performance unit represents the right to earn one share of common stock. Awards can range from 0% to 150% of the target award opportunities. In the event of a change in control, the performance units are paid out in cash based on the greater of actual performance or target award.

As of May 1, 2004, awards under the stock incentive plan, were accounted for under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations. The following table illustrates the effect on net income and net income (loss) per share if we had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” to stock-based employee compensation.

	Three Months Ended				Six Months Ended
In thousands except per share data	May 1, 2004		May 3, 2003		May 1, 2004		May 3, 2003
Net income (loss), as reported	$ 18,840		$ 2,397		$ 19,778		$ (3,130	)
Add:
Compensation expense included
in reported net income, net of
related tax effect	685		943		2,235		943
Deduct:
Compensation expense determined
under SFAS No. 123, net of related taxes	(2,850	)	(2,935	)	(5,129	)	(4,642	)

Pro forma net income (loss)	$ 16,675		$ 405		$ 16,884		$ (6,829	)

Net income (loss) per share
As reported
Basic	$ 0.36		$ 0.05		$ 0.38		$ (0.06	)

Diluted	$ 0.35		$ 0.05		$ 0.37		$ (0.06	)

Pro forma
Basic	$ 0.32		$ 0.01		$ 0.33		$ (0.14	)

Diluted	$ 0.31		$ 0.01		$ 0.32		$ (0.14	)

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

	Three Months Ended				Six Months Ended
In thousands	May 1, 2004		May 3, 2003		May 1, 2004		May 3, 2003
Net income (loss)	$ 18,840		$ 2,397		$ 19,778		$(3,130	)
Comprehensive income:
Translation adjustment	(11,229	)	9,223		(3,803	)	17,182
Derivative fair value adjustment	(370	)	(825	)	(604	)	446

Total comprehensive income	$ 7,241		$ 10,795		$ 15,371		$ 14,498

5. Basic and Diluted Net Income (Loss) Per Share

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

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

	Three Months Ended		Six Months Ended
In thousands except per share data	May 1, 2004	May 3, 2003	May 1, 2003	May 3, 2002
Numerator:
Net income (loss)	$18,840	$ 2,397	$19,778	$(3,130	)
Denominator:
Denominator for basic net income per share -
Weighted average shares	52,179	50,228	51,566	50,228
Effect of dilutive securities:
Stock options, restricted stock and
performance units	1,561	69	1,447	--

Denominator for diluted net income per share -
Adjusted weighted average shares and
assumed conversions	53,740	50,297	53,013	50,228

Basic net income (loss) per share	$ 0.36	$ 0.05	$ 0.38	$ (0.06	)

Diluted net income (loss) per share	$ 0.35	$ 0.05	$ 0.37	$ (0.06	)

6. Contingent Liabilities:

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

John G. Kling, purportedly on his own behalf and “in a representative capacity for the Harnischfeger Industries Employees’ Savings Plan,” filed suit in the United States District Court for the District of Massachusetts on November 9, 2001, against certain of our present and former employees, officers and directors. This action seeks damages in an unspecified amount based on, among other things, allegations that the members of our Pension Investment Committee, the Pension Committee of the Board of Directors, and Fidelity Management Trust Company failed to properly discharge their fiduciary obligations under ERISA with respect to the “Harnischfeger Common Stock Fund” in the Harnischfeger Industries Employees’ Savings Plan. A motion to dismiss our former directors, the Company and Company plans and committees from this action is pending.

On February 27, 2003, Joy Mining Machinery Limited (“Joy MM”), one of our subsidiaries located in the United Kingdom, commenced an arbitration in the International Centre for the Settlement of Investment Disputes against The General Organization for Industrial and Mining Projects (“IMC”), an agency of the government of Egypt, to resolve certain disputes arising under an agreement entered into in 1998 between Joy MM and IMC relating to underground mining equipment for the Abu Tartur project in Egypt. An arbitration panel has been appointed and proceedings before it have begun. Legal proceedings commenced in late 2002 by IMC against Joy MM in Egypt in this matter are also pending. IMC may seek wrongfully to draw on approximately $15 million in bank guarantees established for the benefit of IMC in connection with the agreement.

By notice dated May 16, 2003, Sokolovskaya Investment Company (“SIC”), a mining company in Russia, filed a request for arbitration with the ICC International Court of Arbitration against Joy MM to recover damages alleged to have arisen out of contracts entered into by Joy MM and SIC in 1995 and 1996 for the supply of underground mining equipment and related services. SIC seeks damages for loss of profit, delay, repairs, loss of use and other consequential damages of between $89 million and $98 million. An arbitration panel has been selected and proceedings before it have commenced.

At May 1, 2004, we were contingently liable to banks, financial institutions and others for approximately $85.9 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 $85.9 million, approximately $6.2 million was issued at our request on behalf of Beloit Corporation. At May 1, 2004, there were $1.2 million of outstanding letters of credit or other guarantees issued by non-U.S. banks for non-U.S. subsidiaries.

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

We have entered into various forward foreign exchange contracts with major international financial institutions for the purpose of hedging our risk of loss associated with changes in foreign exchange rates. These contracts involve off-balance-sheet market and credit risk. As of May 1, 2004, the nominal or face value of forward foreign exchange contracts to which we are a party, in absolute U.S. dollar equivalent terms, was $92.8 million.

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

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

7. Inventories

Consolidated inventories consisted of the following:

In thousands	May 1, 2004		November 1, 2003

Finished goods	$	239,448	$	226,758
Work in process and purchased parts		153,698		131,512
Raw materials		27,337		24,659


	$	420,483	$	382,929

8. Warranties

We provide a warranty reserve for the estimated costs that may be incurred under product warranties to remedy deficiencies of quality or performance in our products. These product warranties extend over either a specified period of time, units of production or machine hours depending upon the product subject to the warranty. We accrue a provision for estimated future warranty costs based upon the historical relationship of warranty costs to sales. The warranty reserve is included in other accrued liabilities in the Condensed Consolidated Balance Sheet. We periodically review the adequacy of the accrual for product warranties and adjust the warranty percentage and accrued warranty reserve for actual experience as appropriate. The following table reconciles the changes in the Company’s product warranty reserve:

	Three Months Ended		Six Months Ended
In thousands	May 1, 2004	May 3, 2003	May 1, 2004	May 3, 2003
Balance, beginning of period	$ 30,168	$ 33,677	$ 30,443	$ 33,904
Accrual for warranty expensed during
the three month period	5,970	5,447	9,565	7,936
Settlements made during the period