Form 10-Q JOY GLOBAL INC For: Apr 29

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June 3, 2016 3:29 PM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________

FORM 10-Q

____________________________________________

(MARK ONE)



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

FOR THE QUARTERLY PERIOD ENDED April 29, 2016



¨	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 ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, 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 ý 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	ý	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 ý

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



Class		May 27, 2016
Common Stock, $1 par value		98,137,336

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JOY GLOBAL INC.

FORM 10-Q INDEX

April 29, 2016



	PAGE NO.
PART I. – FINANCIAL INFORMATION

Item 1 – Financial Statements

Condensed Consolidated Statements of Operations - Quarters and Six Months Ended April 29, 2016 and May 1, 2015	3

Condensed Consolidated Statements of Comprehensive Income (Loss) - Quarters and Six Months Ended April 29, 2016 and May 1, 2015	4

Condensed Consolidated Balance Sheets - April 29, 2016 and October 30, 2015	5

Condensed Consolidated Statements of Cash Flows - Six Months Ended April 29, 2016 and May 1, 2015	6

Condensed Notes to Interim Consolidated Financial Statements	7

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	36

Item 3 – Quantitative and Qualitative Disclosures About Market Risk	48

Item 4 – Controls and Procedures	48

PART II. – OTHER INFORMATION

Item 1 – Legal Proceedings	49

Item 1A – Risk Factors	49

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	49

Item 3 – Defaults Upon Senior Securities	49

Item 4 – Mine Safety Disclosures	49

Item 5 – Other Information	49

Item 6 – Exhibits	50

Signatures	51

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Forward-Looking Statements

This document contains forward-looking statements, including estimates, projections, statements relating to our business plans, objectives, pending acquisitions or divestitures, expected operating results and other non-historical information, and the assumptions on which those statements are based. These statements constitute "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 current expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from any forward-looking statement. In addition, certain market outlook information and other market statistical data contained herein 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 arising from regulations affecting the global mining industry, risks associated with acquisitions and the other risks discussed in Item 1A, Risk Factors, of our Annual Report on Form 10-K for our fiscal year ended October 30, 2015 and in other filings that we make with the U.S. Securities and Exchange Commission (the "SEC"). Any or all of these factors could cause our results of operations, financial condition or liquidity for future periods to differ materially from those expressed in or implied by any forward-looking statement. Furthermore, there may be other factors that could cause our actual results to differ materially from the results referred to in any forward-looking statement. We undertake no obligation to update or revise any forward-looking statements to reflect events or circumstances after the date on which such statements are made or to reflect the occurrence of unanticipated events, except as required by law.

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PART I. - FINANCIAL INFORMATION

Item 1. Financial Statements

JOY GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share data)



	Quarter Ended						Six Months Ended
	April 29, 2016			May 1, 2015			April 29, 2016			May 1, 2015
Net sales	$	601,985		$	810,523		$	1,128,285		$	1,514,396
Cost of sales	458,479			576,226			896,735			1,093,796
Product development, selling and administrative expenses	116,643			131,142			227,056			261,535
Restructuring expenses	33,394			11,110			60,053			11,775
Other income	(2,206		)	(900		)	(6,147		)	(4,113		)
Operating (loss) income	(4,325		)	92,945			(49,412		)	151,403
Interest income	858			2,980			1,665			5,920
Interest expense	(12,437		)	(16,252		)	(25,360		)	(32,149		)
(Loss) income before income taxes	(15,904		)	79,673			(73,107		)	125,174
(Benefit) provision for income taxes	(599		)	23,715			(17,581		)	38,691
Net (loss) income from continuing operations	(15,305		)	55,958			(55,526		)	86,483
Income from discontinued operations, net of income taxes	5,466			—			5,466			—
Net (loss) income	$	(9,839	)	$	55,958		$	(50,060	)	$	86,483

Basic (loss) earnings per share:
(Loss) income from continuing operations	$	(0.16	)	$	0.57		$	(0.57	)	$	0.89
Income from discontinued operations	0.06			—			0.06			—
Net (loss) income	$	(0.10	)	$	0.57		$	(0.51	)	$	0.89

Diluted (loss) earnings per share:
(Loss) income from continuing operations	$	(0.16	)	$	0.57		$	(0.57	)	$	0.88
Income from discontinued operations	0.06			—			0.06			—
Net (loss) income	$	(0.10	)	$	0.57		$	(0.51	)	$	0.88

Dividends per share	$	0.01		$	0.20		$	0.02		$	0.40

Weighted average shares outstanding:
Basic	97,921			97,416			97,886			97,482
Diluted	97,921			97,972			97,886			98,055

See Notes to Condensed Consolidated Financial Statements.

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JOY GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In thousands)



	Quarter Ended
	April 29, 2016			May 1, 2015
Net (loss) income	$	(9,839	)	$	55,958
Other comprehensive income (loss):
Change in unrecognized prior service costs on pension and other postretirement obligations, net of (benefits) taxes of ($197) and $16	(181		)	34
Derivative instrument fair market value adjustment, net of tax benefits of $219 and $47	(509		)	(89		)
Foreign currency translation adjustment on long-term intercompany foreign loans	2,838			7,147
Other foreign currency translation adjustment	35,616			1,009
Total other comprehensive income, net of taxes	37,764			8,101
Comprehensive income	$	27,925		$	64,059




	Six Months Ended
	April 29, 2016			May 1, 2015
Net (loss) income	$	(50,060	)	$	86,483
Other comprehensive income (loss):
Change in unrecognized prior service costs on pension and other postretirement obligations, net of (benefits) taxes of ($93) and $32	(135		)	69
Derivative instrument fair market value adjustment, net of (benefits) taxes of ($365) and $1,473	(855		)	3,599
Foreign currency translation adjustment on long-term intercompany foreign loans	6,217			(3,746		)
Other foreign currency translation adjustment	174			(108,820		)
Total other comprehensive income (loss), net of taxes	5,401			(108,898		)
Comprehensive loss	$	(44,659	)	$	(22,415	)

See Notes to Condensed Consolidated Financial Statements.

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JOY GLOBAL INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)



	April 29, 2016		October 30, 2015
	(unaudited)		(audited)
ASSETS
Current assets:
Cash and cash equivalents	$	160,878	$	102,885
Accounts receivable, net	670,376		812,073
Inventories	939,863		1,007,925
Other current assets	123,033		145,559
Assets held for sale	31,025		—
Total current assets	1,925,175		2,068,442
Property, plant and equipment, net	716,355		792,032
Other assets:
Other intangible assets, net	236,105		255,710
Goodwill	350,875		354,621
Deferred income taxes	153,008		118,913
Other non-current assets	126,582		122,728
Total other assets	866,570		851,972
Total assets	$	3,508,100	$	3,712,446
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings, including current portion of long-term obligations	$	23,353	$	26,321
Trade accounts payable	240,900		275,789
Employee compensation and benefits	83,723		90,335
Advance payments and progress billings	225,167		229,470
Accrued warranties	46,981		52,146
Other accrued liabilities	206,804		225,277
Current liabilities of discontinued operations	—		11,582
Total current liabilities	826,928		910,920
Long-term obligations	983,488		1,060,643
Other liabilities:
Liabilities for postretirement benefits	18,659		19,540
Accrued pension costs	167,999		175,699
Other non-current liabilities	131,259		125,635
Total other liabilities	317,917		320,874
Shareholders’ equity	1,379,767		1,420,009
Total liabilities and shareholders’ equity	$	3,508,100	$	3,712,446

See Notes to Condensed Consolidated Financial Statements.

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JOY GLOBAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)



	Six Months Ended
	April 29, 2016			May 1, 2015
Operating Activities:
Net (loss) income	$	(50,060	)	$	86,483
Income from discontinued operations	(5,466		)	—
Adjustments to continuing operations:
Depreciation and amortization	77,393			66,176
Impairment charges	17,146			—
Changes in deferred income taxes	(1,876		)	17,593
Contributions to defined benefit employee pension and postretirement plans	(9,420		)	(12,254		)
Defined benefit employee pension and postretirement plan expense (income)	1,659			(12,510		)
Share-based compensation expense	11,240			15,965
Changes in long-term receivables	(9,172		)	10,882
Other adjustments to continuing operations, net	20,120			2,270
Changes in working capital items attributed to continuing operations:
Accounts receivable, net	144,892			105,010
Inventories	54,995			(139,419		)
Other current assets	2,114			(17,603		)
Trade accounts payable	(34,316		)	(36,574		)
Employee compensation and benefits	(3,605		)	(47,831		)
Advance payments and progress billings	(5,559		)	57,926
Accrued warranties	(4,338		)	(7,313		)
Other accrued liabilities	(52,976		)	(36,040		)
Net cash provided by operating activities	152,771			52,761
Investing Activities:
Property, plant and equipment acquired	(21,094		)	(39,795		)
Proceeds from sale of property, plant and equipment	10,587			3,958
Other investing activities, net	3			373
Net cash used by investing activities	(10,504		)	(35,464		)
Financing Activities:
Common stock issued	—			2,560
Dividends paid	(1,977		)	(38,964		)
Repayments of term loan	(18,750		)	—
Payments on credit agreement	(58,600		)	—
Repayments of short term debt	(3,165		)	—
Financing fees	(1,011		)	—
Treasury stock purchased	—			(50,000		)
Other financing activities, net	—			865
Net cash used by financing activities	(83,503		)	(85,539		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	(771		)	(9,858		)
Increase (Decrease) in Cash and Cash Equivalents	57,993			(78,100		)
Cash and Cash Equivalents at Beginning of Period	102,885			270,191
Cash and Cash Equivalents at End of Period	$	160,878		$	192,091

See Notes to Condensed Consolidated Financial Statements.

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JOY GLOBAL INC.

CONDENSED NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


1.	Description of Business

Joy Global Inc. (the "Company," "we" and "us") is a leading manufacturer and servicer of high productivity mining equipment for the extraction of metals and minerals. We manufacture and market original equipment and parts and perform services for both underground and surface mining, as well as certain industrial applications. Our equipment is used in major mining regions throughout the world to mine coal, copper, iron ore, oil sands, gold and other minerals. We operate in two business segments: Underground Mining Machinery ("Underground") and Surface Mining Equipment ("Surface"). We are a major manufacturer of underground mining machinery for the extraction and haulage of coal and other bedded minerals. We are also a major producer of surface mining equipment for the extraction and haulage of copper, coal and other minerals and ores. We offer comprehensive direct service, which includes our smart service offerings, near major mining regions worldwide and provide extensive operational support for many types of equipment used in mining. Our principal manufacturing facilities are located in the United States, including facilities in Alabama, Texas and Wisconsin, and internationally, including facilities in Australia, Canada, China, France, South Africa and the United Kingdom.


2.	Basis of Presentation

The Condensed Consolidated Financial Statements presented in this Quarterly Report on Form 10-Q are unaudited and are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP") and pursuant to SEC rules and regulations. 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 of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Ultimate realization of assets and settlement of liabilities in the future could differ from those 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 30, 2015. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year. Further, results for all periods presented reflect the voluntary change in our method of accounting for actuarial gains and losses and the calculation of our expected return on plan assets for all of our pension and other post-retirement benefit plans as discussed further in our Form 10-K for the year ended October 30, 2015.


3.	Acquisitions

Acquisition of Montabert S.A.S.

On June 1, 2015, we completed the acquisition of 100% of the equity of Montabert S.A.S. ("Montabert") for approximately $121.5 million dollars, gross of cash acquired of $7.1 million dollars. Montabert specializes in the design, production and distribution of high quality hydraulic rock breakers, pneumatic equipment, drilling attachments, drifters and related parts and tools. This acquisition expands our product and service capabilities for hard rock mining, tunneling and rock excavation, further diversifying our commodity and end market exposures. Montabert's results of operations have been included as part of the Underground segment from the date of the acquisition forward.

In connection with the acquisition, we recorded goodwill of approximately $55.5 million and intangible assets of approximately $35.1 million. The intangible assets are primarily comprised of customer relationships, trade names and patents, which are being amortized over their respective estimated useful lives. Other assets acquired consist of working capital related items and property, plant and equipment, with values that are not individually significant.


4.	Inventories

Consolidated inventories consist of the following:

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In thousands	April 29, 2016		October 30, 2015
Finished goods	754,555		$	814,306
Work in process	134,729		135,310
Raw materials	50,579		58,309
Total inventories	$	939,863	$	1,007,925

Finished goods include finished components and parts in addition to any finished equipment.


5.	Held for Sale Assets

As of April 29, 2016, our steel mill business and certain assets associated with one of our electrical facilities met the held for sale criteria. We are disposing of these non-core assets in our Surface segment in response to adverse market conditions. The disposal groups have been recognized at the lower of cost or fair value less costs to sell. No gain or loss was recognized in the quarter ended April 29, 2016, in part as a result of a prior impairment recognized for the steel mill disposal group.

The value of the assets consist of the following:



In thousands	April 29, 2016
Inventories	3,642
Property, plant and equipment, net	20,702
Other intangible assets, net	2,336
Goodwill	4,345
Total Assets Held for Sale	$	31,025

We have recorded these assets as current in the Assets held for sale line of the Condensed Consolidated Balance Sheet, as we expect these assets to be sold within the next year.


6.	Goodwill and Other Intangible Assets

Finite-lived intangible assets are amortized to reflect the pattern of economic benefits consumed, which is principally the straight-line method. Intangible assets that are subject to amortization are evaluated for potential impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. No impairment was identified related to our finite-lived intangible assets as of either April 29, 2016 or May 1, 2015.

Indefinite-lived intangible assets are not amortized but are evaluated for impairment annually or more frequently if events or changes occur that suggest an impairment in carrying value, such as a significant adverse change in the business climate. Due to the Company's decision to idle certain facilities in China and the continued market challenges in that region, we conducted an assessment of our indefinite-lived trademarks as of April 29, 2016 using the relief-from-royalty methodology, which evaluates the estimated licensing cost of an intangible asset as an alternative to ownership. This valuation concluded that the carrying value of the Company's indefinite-lived trademarks exceeded the estimated licensing cost. As a result, the Company recorded a $6.6 million non-cash, pre-tax impairment charge to its Underground segment in the second quarter of fiscal 2016. Assumptions critical to the process include forecasted information and discount rates. This fair value determination is categorized as Level 3 in the fair value hierarchy. See Note 17, Fair Value Measurements, for the definition of Level 3 inputs. This charge is recorded in the Consolidated Statement of Operations under the heading Restructuring expenses.

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. Goodwill is assigned to specific reporting units, and is tested for impairment at least annually during the fourth quarter of our fiscal year or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. The most recent goodwill impairment test was performed as of January 29, 2016, as our total shareholders’ equity exceeded our market capitalization based on our stock price of $9.97 per share at that point in time, and therefore indicated the possibility of an impairment to goodwill. This interim goodwill impairment test focused on our Surface reporting unit, as all Underground goodwill was fully impaired in the fourth quarter of fiscal 2015. After completing our step one analysis, we concluded that the estimated fair value of our Surface reporting unit exceeded its carrying value by 15%. We determined that there were no indicators of impairment for the quarter ended April 29, 2016 that would warrant an additional interim impairment test at that point in time. Although we have concluded that there is no impairment on the goodwill of $350.9 million associated with our Surface reporting unit as of April 29, 2016, we will continue to closely monitor this in the future considering the volatility and uncertainty in the global commodity markets that our surface mining equipment services. Should there be further market declines, particularly in Latin American copper or North American coal and iron ore, which are the most

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significant markets serviced by our Surface reporting unit, or if our market capitalization falls below our total shareholders' equity in future periods, there would be an increased risk that we would be required to recognize impairment to the Surface reporting unit's goodwill.


7.	Warranties

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

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



	Quarter Ended						Six Months Ended
In thousands	April 29, 2016			May 1, 2015			April 29, 2016			May 1, 2015
Balance, beginning of period	50,518			$	58,528		$	52,146		$	67,272
Accrual for warranty expensed during the period	5,071			12,673			11,965			18,853
Settlements made during the period	(9,270		)	(15,012		)	(16,262		)	(26,387		)
Effect of foreign currency translation	662			2,005			(868		)	(1,544		)
Balance, end of period	$	46,981		$	58,194		$	46,981		$	58,194


8.	Borrowings and Credit Facilities

On July 29, 2014, we entered into a revolving credit agreement that matures on July 29, 2019 (the "Credit Agreement"). On December 14, 2015, we entered into an amendment to our Credit Agreement that increased the maximum consolidated leverage ratio for the period beginning in the second quarter of fiscal 2016 through the first quarter of fiscal 2018. The amendment increased the permitted ratio from 3.0x to 3.5x for the second quarter of fiscal 2016 and will further increase the permitted ratio to 4.25x in the third quarter of fiscal 2016 and to 4.5x in the fourth quarter of fiscal 2016. The ratio will begin to decline on a quarterly basis beginning in the third quarter of fiscal 2017 and return to 3.0x in the second quarter of fiscal 2018. The amendment also reduced the aggregate amount of revolving commitments of the lenders from $1.0 billion to $850.0 million and added a letter of credit sublimit of $500.0 million. In addition, we also agreed to limit priority debt (secured indebtedness and the unsecured indebtedness of our foreign subsidiaries) to 10% of consolidated net worth and to limit cash dividends to $25.0 million per year in the aggregate. We may continue to request an increase of up to $250.0 million of additional aggregate revolving commitments, subject to the terms and conditions contained in the Credit Agreement. Under the terms of the Credit Agreement, we pay a commitment fee ranging from 0.09% to 0.30% on the unused portion of the revolving credit facility based on our credit rating. Letters of credit issued under applicable provisions of the Credit Agreement represent an unfunded utilization of the Credit Agreement for purposes of calculating the periodic commitment fee due. Eurodollar rate loans bear interest for a period from the applicable borrowing date until a date one week or one, two, three or six months thereafter, as selected by the Company, at the corresponding Eurodollar rate plus a margin of 1.0% to 2.0% depending on the Company's credit rating. Base rate loans bear interest from the applicable borrowing date at a rate equal to (i) the highest of (a) the federal funds rate plus 0.5%, (b) the rate of interest in effect for such day as publicly announced by the administrative agent as its "prime rate," or (c) a daily rate equal to the one-month Eurodollar rate plus 1.0%, plus (ii) a margin that varies according to the Company's credit rating. Swing line loans bear interest at either the base rate described above or the daily floating Eurodollar rate plus the applicable margin, as selected by the Company. The Credit Agreement 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 Credit Agreement also restricts payment of dividends or other returns of capital to shareholders if the consolidated leverage ratio exceeds the maximum amount set forth therein. As of April 29, 2016, we were in compliance with all financial covenants of the Credit Agreement.

As of April 29, 2016, there were no direct borrowings under the Credit Agreement. Total interest expense recognized for direct borrowings under the Credit Agreement for the quarters ended April 29, 2016 and May 1, 2015 was $0.1 million and $0.2 million, respectively. For the six months ended April 29, 2016 and May 1, 2015, total interest expense recognized for direct borrowings under the Credit Agreement was $0.5 million and $0.4 million, respectively. Outstanding standby letters of credit issued under the Credit Agreement, which count toward the $850.0 million credit limit, totaled $112.1 million. As of April 29, 2016, there was $737.9 million available for borrowings under the Credit Agreement.

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scheduled to mature on July 16, 2016 and provided an initial commitment of $500.0 million, which had been drawn in full in conjunction with our fiscal 2011 acquisition of LeTourneau Technologies, Inc. and had been amortized to $375.0 million at the date that we entered into the Term Loan. We utilized the $375.0 million commitment under the Term Loan to repay the balance outstanding under the Prior Term Loan. On December 14, 2015, the Term Loan was amended to be consistent with the revolving Credit Agreement with respect to the maximum leverage ratio, restrictions on priority debt and dividends, and other restricted payments. The Term Loan requires quarterly principal payments beginning in fiscal 2016, of which $4.7 million and $9.4 million were paid during the quarter and six months ended April 29, 2016, respectively. Additionally, in the second quarter we prepaid $9.4 million of the payments due in the third and fourth quarter of fiscal 2016. The Term Loan contains terms and conditions that are the same as 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. As of April 29, 2016, 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 5.125% Senior Notes due in 2021 (the "2021 Notes") 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, 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%.

In November 2006, we issued Senior Notes for an aggregate principal amount of $150.0 million at 6.625% due 2036 (the "2036 Notes"). Interest on the 2036 Notes is paid semi-annually in arrears on May 15 and November 15 of each year, and the 2036 Notes are guaranteed by each of our current and future material domestic subsidiaries, as well as certain current immaterial domestic subsidiaries. The 2036 Notes were originally issued in a private placement under an exemption from registration provided by the Securities Act. In the second quarter of fiscal 2007, the 2036 Notes were exchanged for substantially identical 2036 Notes in an exchange that was registered under the Securities Act. At our option, we may redeem some or all of the 2036 Notes at a redemption price of the greater of 100% of the principal amount of the 2036 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 0.375%.

Our borrowings also include amounts related to transfers of certain receivables under factoring arrangements with recourse related to our French operations.

Direct borrowings and capital lease obligations consist of the following:



In thousands	April 29, 2016			October 30, 2015
Domestic:
Term Loan due 2019	356,250			375,000
5.125% Senior Notes due 2021	497,397			497,195
6.625% Senior Notes due 2036	148,569			148,553
Credit Agreement	—			58,600
Foreign:
Capital leases	83			159
Factoring arrangement	4,542			7,457
Total obligations	1,006,841			1,086,964
Less: Amounts due within one year	(23,353		)	(26,321		)
Long-term obligations	$	983,488		$	1,060,643


9.	Accumulated Other Comprehensive Income (Loss)

Comprehensive income (loss) and its components are presented in the Condensed Consolidated Statements of Comprehensive Income (Loss). Changes in accumulated other comprehensive income (loss), net of taxes, consist of the following:

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	Quarter ended April 29, 2016												Quarter ended May 1, 2015
	Change in Unrecognized Prior Service Costs on Pension and Other Postretirement Obligations			Derivative Instrument Fair Market Value Adjustment			Foreign Currency Translation Adjustment			Total			Change in Unrecognized Prior Service Costs on Pension and Other Postretirement Obligations			Derivative Instrument Fair Market Value Adjustment			Foreign Currency Translation Adjustment			Total
Beginning balance	$	(1,236	)	$	9,948		$	(188,147	)	$	(179,435	)	$	(1,451	)	$	8,424		$	(130,252	)	$	(123,279	)
Other comprehensive income (loss) before reclassifications, net of taxes	—			(1,955		)	38,454			36,499			—			(407		)	8,156			7,749
Amounts reclassified from accumulated other comprehensive (loss) income, net of taxes	(181		)	1,446			—			1,265			34			318			—			352
Total other comprehensive (loss) income, net of taxes	(181		)	(509		)	38,454			37,764			34			(89		)	8,156			8,101
Ending balance	$	(1,417	)	$	9,439		$	(149,693	)	$	(141,671	)	$	(1,417	)	$	8,335		$	(122,096	)	$	(115,178	)





	Six months ended April 29, 2016												Six months ended May 1, 2015
	Change in Unrecognized Prior Service Costs on Pension and Other Postretirement Obligations			Derivative Instrument Fair Market Value Adjustment			Foreign Currency Translation Adjustment			Total			Change in Unrecognized Prior Service Costs on Pension and Other Postretirement Obligations			Derivative Instrument Fair Market Value Adjustment		Foreign Currency Translation Adjustment			Total
Beginning balance	$	(1,282	)	$	10,294		$	(156,084	)	$	(147,072	)	$	(1,486	)	$	4,736	$	(9,530	)	$	(6,280	)
Other comprehensive income (loss) before reclassifications, net of taxes	—			(2,745		)	6,391			3,646			—			2,213		(112,566		)	(110,353		)
Amounts reclassified from accumulated other comprehensive (loss) income, net of taxes	(135		)	1,890			—			1,755			69			1,386		—			1,455
Total other comprehensive (loss) income, net of taxes	(135		)	(855		)	6,391			5,401			69			3,599		(112,566		)	(108,898		)
Ending balance	$	(1,417	)	$	9,439		$	(149,693	)	$	(141,671	)	$	(1,417	)	$	8,335	$	(122,096	)	$	(115,178	)

Details of the reclassifications from accumulated other comprehensive (loss) income are disclosed below:

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	Amounts Reclassified from Accumulated Other Comprehensive Income (Loss)
	Quarter Ended						Six Months Ended						Affected Line Items in the Statements of Operations
	April 29, 2016			May 1, 2015			April 29, 2016			May 1, 2015			Affected Line Items in the Statements of Operations
Change in unrecognized prior service costs on pension and other postretirement obligations:
Amortization of prior service cost	$	60		$	50		$	110		$	101		Cost of sales/Product development, selling and administrative expense*
Curtailment gain	(438		)	—			(338		)	—			Cost of sales/administrative expense
Deferred tax	197			(16		)	93			(32		)	Provision for income taxes
Amounts reclassified from accumulated other comprehensive (loss) income, net of taxes	$	(181	)	$	34		$	(135	)	$	69

Derivative instrument fair market value adjustment:
Foreign exchange cash flow hedges	$	2,072		$	455		$	2,703		$	1,964		Net sales/Cost of sales**
Deferred tax	(626		)	(137		)	(813		)	(578		)	Provision for income taxes
Amounts reclassified from accumulated other comprehensive income, net of taxes	$	1,446		$	318		$	1,890		$	1,386

Total reclassifications for the period	$	1,265		$	352		$	1,755		$	1,455

* Amounts are included in the computation of net periodic benefits costs as either cost of sales or product development, selling and administrative expense as appropriate. Refer to Note 13, Retiree Benefits, for additional information.

** Amounts are included in either net sales or cost of sales as appropriate. Refer to Note 14, Derivatives, for additional information.


10.	Shareholders' Equity

In August 2013, our Board of Directors authorized the repurchase of up to $1.0 billion in shares of our common stock until August 2016. Under the program, we may repurchase shares in the open market in accordance with applicable SEC rules and regulations. During the quarter and six months ended April 29, 2016, we did not repurchase any shares of common stock. During the quarter ended May 1, 2015, we did not repurchase any shares of common stock. During the six months ended May 1, 2015, we repurchased 954,580 shares of common stock for approximately $50.0 million. Since the program's inception, we have repurchased 9,771,605 shares of common stock under the program for approximately $533.4 million, leaving $466.6 million available under the program.


11.	Share-Based Compensation

Total share-based compensation expense recognized for the quarters ended April 29, 2016 and May 1, 2015 is $6.9 million and $8.4 million, respectively. Total share-based compensation expense recognized for the six months ended April 29, 2016 and May 1, 2015 is $11.2 million and $16.0 million, respectively. The total share-based compensation expense is reflected in our Condensed Consolidated Statements of Cash Flows in operating activities as an add back to net income.

The corresponding deferred tax assets recognized related to the share-based compensation are $1.9 million and $2.2 million for the quarters ended April 29, 2016 and May 1, 2015, respectively. The corresponding deferred tax asset recognized related to the share-based compensation expense are $3.2 million and $4.1 million for the six months ended April 29, 2016 and May 1, 2015, respectively.


12.	Restructuring Charges

During fiscal 2015, in response to the adverse market conditions, management implemented further cost reduction initiatives, which we refer to as the Restructuring Program. Expected and actual costs related to the Restructuring Program have continued into 2016 as more activities have been planned and initiated. These costs include entering into severance and termination agreements

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and full or partial closures and idling of certain facilities in order to better align the Company's overall cost structure with anticipated levels of future demand. We currently expect to complete the Restructuring Program by the end of fiscal 2017.

Restructuring charges incurred to date related to the Restructuring Program have consisted primarily of employee severance and termination costs, asset impairment charges and accelerated depreciation. Other costs consist primarily of equipment and inventory relocation costs, as well as inventory write-downs and some environmental and legal expenses. The following tables summarize restructuring costs by line item:



In thousands	Quarter ended April 29, 2016						Quarter ended May 1, 2015
	Restructuring Expenses		Cost of Sales		Total		Restructuring Expenses		Cost of Sales		Total
Employee severance and termination costs	$	9,912	$	—	$	9,912	$	11,110	$	—	$	11,110
Asset impairment charges	17,145		—		17,145		—		—		—
Accelerated depreciation	5,089		—		5,089		—		—		—
Other costs	1,248		1,306		2,554		—		—		—
Total restructuring and related charges	$	33,394	$	1,306	$	34,700	$	11,110	$	—	$	11,110



In thousands	Six months ended April 29, 2016						Six months ended May 1, 2015
	Restructuring Expenses		Cost of Sales		Total		Restructuring Expenses		Cost of Sales		Total
Employee severance and termination costs	$	31,065	$	—	$	31,065	$	11,775	$	—	$	11,775
Asset impairment charges	17,145		—		17,145		—		—		—
Accelerated depreciation	9,868		—		9,868		—		—		—
Other costs	1,975		1,306		3,281		—		—		—
Total restructuring and related charges	$	60,053	$	1,306	$	61,359	$	11,775	$	—	$	11,775

The following tables summarize the amounts incurred for the period by segment:



In thousands	Quarter ended April 29, 2016
	Underground		Surface		Corporate		Total
Employee severance and termination costs*	$	8,828	$	1,084	$	—	$	9,912
Asset impairment charges	17,145		—		—		17,145
Accelerated depreciation	5,089		—		—		5,089
Other costs	2,554		—		—		2,554
Total restructuring and related charges	$	33,616	$	1,084	$	—	$	34,700



In thousands	Quarter ended May 1, 2015
	Underground		Surface		Corporate		Total
Employee severance and termination costs	$	4,970	$	5,888	$	252	$	11,110
Total restructuring and related charges	$	4,970	$	5,888	$	252	$	11,110



In thousands	Six months ended April 29, 2016
	Underground		Surface		Corporate		Total
Employee severance and termination costs*	$	29,022	$	1,648	$	395	$	31,065
Asset impairment charges	17,145		—		—		17,145
Accelerated depreciation	9,868		—		—		9,868
Other costs	3,281		—		—		3,281
Total restructuring and related charges	$	59,316	$	1,648	$	395	$	61,359

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In thousands	Six months ended May 1, 2015
	Underground		Surface		Corporate		Total
Employee severance and termination costs	$	5,416	$	6,107	$	252	$	11,775
Total restructuring and related charges	$	5,416	$	6,107	$	252	$	11,775

* The amount incurred during the quarter and six months ended April 29, 2016 includes $0.2 million of income and $9.4 million of expense for contractual termination benefits under the Joy Global qualified pension plan as part of continued restructuring activities in our Underground division. As noted below, amounts accrued for contractual termination benefits are included in our retiree benefit liabilities.

The impairment charges above relate to both property, plant and equipment and indefinite-lived trademarks. As of April 29, 2016, we assessed the long-lived assets of an asset group in China for impairment as a result of our decision to idle certain facilities in China due to the continued market challenges in that region. As such, it was determined that the cash flows associated with this asset group would be insufficient to support their carrying value. A valuation was performed over property, plant and equipment using the market approach for real property. Personal property was valued primarily using the cost approach. As a result of this analysis, we recorded non-cash impairment charges of $10.6 million in the quarter ended April 29, 2016 for our Underground segment related to such property, plant, and equipment.

As discussed in Note 6, "Goodwill and Other Intangible Assets," we also assessed our indefinite-lived trademarks using the relief-from-royalty methodology as of April 29, 2016 due to our decision to idle certain facilities in China and the continued market challenges in that region. As a result, a non-cash, pre-tax impairment charge of $6.6 million was recorded in the quarter ended April 29, 2016 by our Underground segment

The following table summarizes the cumulative amounts incurred from inception to date by segment:



In thousands	April 29, 2016
	Underground		Surface		Corporate		Total
Employee severance and termination costs	$	45,362	$	14,099	$	2,980	$	62,441
Asset impairment charges	17,145		—		—		17,145
Accelerated depreciation	11,947		—		—		11,947
Other costs	5,360		—		—		5,360
Total restructuring and related charges	$	79,814	$	14,099	$	2,980	$	96,893

The following table summarizes the total expected costs from inception of the Restructuring Program through fiscal 2017 by segment:



In thousands	April 29, 2016
	Underground		Surface		Corporate		Total
Employee severance and termination costs	$	53,000	$	18,000	$	3,000	$	74,000
Asset impairment charges	17,000		—		—		17,000
Accelerated depreciation	15,000		11,000		—		26,000
Other costs	15,000		1,000		—		16,000
Total restructuring and related charges	$	100,000	$	30,000	$	3,000	$	133,000

Amounts impacting the Company's reserves for restructuring charges for its Restructuring Program relate to employee severance and termination costs as follows:

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	Quarter Ended
In thousands	April 29, 2016									May 1, 2015
	Employee Severance and Termination Costs			Other Costs			Total			Employee Severance and Termination Costs			Other Costs		Total
Beginning accrual	$	11,191		$	—		$	11,191		$	470		$	—	$	470
Costs incurred	10,186			1,068			11,254			11,110			—		11,110
Costs paid/settled	(5,796		)	(930		)	(6,726		)	(2,287		)	—		(2,287		)
Other adjustments	(371		)	—			(371		)	—			—		—
Effect of foreign currency translation	69			—			69			35			—		35
Ending accrual	$	15,279		$	138		$	15,417		$	9,328		$	—	$	9,328



	Six Months Ended
In thousands	April 29, 2016									May 1, 2015
	Employee Severance and Termination Costs			Other Costs			Total			Employee Severance and Termination Costs			Other Costs		Total
Beginning accrual	$	13,613		$	—		$	13,613		$	—		$	—	$	—
Costs incurred	21,657			1,795			23,452			11,775			—		11,775
Costs paid/settled	(17,099		)	(1,657		)	(18,756		)	(2,565		)	—		(2,565		)
Other adjustments	(2,915		)	—			(2,915		)	—			—		—
Effect of foreign currency translation	23			—			23			118			—		118
Ending accrual	$	15,279		$	138		$	15,417		$	9,328		$	—	$	9,328

Included in other adjustments for the six months ended April 29, 2016 is $2.6 million of contractual termination benefits recognized in fiscal 2015 under the Joy Global qualified pension plan for benefits to be provided to certain employees as part of restructuring activities in our Underground division. Those amounts are recorded in our retiree benefit liabilities and are therefore excluded from the restructuring accrual roll-forward above.

For the Restructuring Program, total restructuring charges are currently anticipated to be approximately $133 million through fiscal 2017, with total expected cash costs related to the Restructuring Program estimated to be approximately $87 million.


13.	Retiree Benefits

The components of the net periodic benefit (income) cost associated with our pension and other postretirement plans are as follows:



	Pension Benefits						Postretirement Benefits
	Quarter Ended						Quarter Ended
In thousands	April 29, 2016			May 1, 2015			April 29, 2016			May 1, 2015
Service cost	$	1,227		$	977		$	122		$	156
Interest cost	18,745			19,688			256			281
Expected return on assets	(23,831		)	(27,311		)	(147		)	(156		)
Amortization of prior service cost	17			17			43			33
Curtailment gain	—			—			(762		)	—
Mark to market adjustment on curtailed plan	—			—			(36		)	—
Contractual termination benefits	(192		)	—			—			—
Net periodic benefit (income) cost	$	(4,034	)	$	(6,629	)	$	(524	)	$	314

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	Pension Benefits						Postretirement Benefits
	Six Months Ended						Six Months Ended
In thousands	April 29, 2016			May 1, 2015			April 29, 2016			May 1, 2015
Service cost	$	2,453		$	1,953		$	313		$	409
Interest cost	37,481			39,346			561			581
Expected return on assets	(47,675		)	(54,589		)	(294		)	(311		)
Amortization of prior service cost	34			35			76			66
Curtailment gain	—			—			(662		)	—
Mark to market adjustment on curtailed plan	—			—			(36		)	—
Contractual termination benefits	9,408			—			—			—
Net periodic benefit cost (income)	$	1,701		$	(13,255	)	$	(42	)	$	745

For the six months ended April 29, 2016, we contributed $9.4 million to our defined benefit employee pension and other postretirement benefit plans, and we expect contributions to be approximately $15.0 million for the full fiscal year.

During the quarter ended January 29, 2016, we recognized $9.6 million of estimated contractual termination benefits under the Joy Global qualified pension plan for benefits to be provided to certain employees as part of restructuring activities in our Underground division. These contractual termination benefits were trued-up to $9.4 million during the quarter ended April 29, 2016 upon finalization of the associated valuation.


14.	Derivatives

We are exposed to certain foreign currency risks in the normal course of our global business operations. We enter into derivative contracts that are 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. These contracts are for forecasted transactions and committed receivables and payables denominated in foreign currencies and are not entered into for speculative purposes. Consequently, any market-related losses on the forward contract would be offset by changes in the value of the hedged item, and, as a result, we are generally not exposed to net market risk associated with these instruments.

Each derivative is classified as either a cash flow hedge, a fair value hedge or an undesignated instrument. All derivatives are recorded at fair value on the Condensed Consolidated Balance Sheets under the heading Other current assets or under the heading Other accrued liabilities, as appropriate. Cash flows from fair value and cash flow hedges are classified within the same category as the item being hedged on the Condensed Consolidated Statements of Cash Flows. Cash flows from undesignated derivative instruments are included in operating activities on the Condensed Consolidated Statements of Cash Flows.

The total notional amount of our derivatives as of April 29, 2016 is $707.9 million.

For derivative contracts that are designated and qualify as 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 statement of operations on the line associated with the underlying transaction for the periods 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 November 2017. Ineffectiveness related to these derivative contracts was not material to the Consolidated Statements of Operations for the quarters and six months ended April 29, 2016 and May 1, 2015.

For derivative contracts that are designated and qualify as a fair value hedge, the gain or loss is recorded in the Condensed Consolidated Statements of Operations under the heading Cost of sales. For the quarters ended April 29, 2016 and May 1, 2015, we recorded a loss of $4.7 million and a gain of $0.2 million, respectively, related to fair value hedges, which were offset by foreign exchange fluctuations of the underlying hedged item. For the six months ended April 29, 2016 and May 1, 2015, we recorded losses of $6.3 million and $0.6 million, respectively, related to fair value hedges, which were offset by foreign exchange fluctuations of the underlying hedged item.

For derivative contracts entered into in order to hedge revaluation of net balance sheet exposures in non-functional currency that are not designated as a fair value hedge or a cash flow hedge, the gain or loss is recorded in the Condensed Consolidated Statements of Operations under the heading Cost of sales. For the quarters ended April 29, 2016 and May 1, 2015, we recorded a loss of $6.9 million and a gain of $1.2 million, respectively, related to undesignated hedges, which were offset by foreign exchange fluctuations. For the six months ended April 29, 2016 and May 1, 2015, we recorded a loss of $2.3 million and a gain of $8.0 million, respectively, related to undesignated hedges, which were offset by foreign exchange fluctuations.

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



In thousands	Effective Portion
	Amount of (Loss) Gain Recognized in Other Comprehensive Income			(Loss) Gain Reclassified from Accumulated Other Comprehensive Income into Earnings
Derivative Hedging Relationship				Location	Amount
Foreign currency forward contracts
Quarter ended April 29, 2016	$	(2,799	)	Cost of sales	$	(2,100	)
				Sales	28
Six months ended April 29, 2016	$	(3,923	)	Cost of sales	$	(2,585	)
				Sales	(118		)
Quarter ended May 1, 2015	$	(595	)	Cost of sales	$	(455	)
				Sales	—
Six months ended May 1, 2015	$	3,104		Cost of sales	$	(1,964	)
				Sales	—

We are exposed to credit risk in the event of nonperformance by counterparties to the forward contracts. The contract amount, along with the 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 it has a positive fair value.


15.	Income Taxes

In accordance with FASB Accounting Standards Codification 740, Income Taxes, each interim period is considered integral to the annual period and tax expense is measured using an estimated annual effective tax rate. An entity is required to record income tax expense each quarter based on its best estimate of the annual effective tax rate for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis, as adjusted for discrete taxable events that occur during the interim period. If, however, the entity is unable to reliably estimate its annual effective tax rate due to the Company’s inability to forecast income by jurisdiction or as a result of rate volatility caused by minor changes in income when projecting near break-even earnings, then the actual effective tax rate for the year-to-date period may be the best annual effective tax rate estimate. For the quarter and six months ended April 29, 2016, the Company determined that the estimated annual effective rate method would not provide a reliable estimate due to the volatility of income tax (benefit) expense to modest changes in forecasted annual pre-tax results. Therefore, the Company recorded a tax benefit for the quarter and six months ended April 29, 2016 based on the actual effective rate (i.e. the “cut-off” method). The effective tax rate for the quarter and six months ended May 1, 2015 was calculated based on an estimated annual effective tax rate in addition to discrete items.

For the quarter ended April 29, 2016, the Company recorded a benefit for income taxes from continuing operations of $0.6 million that resulted in an effective tax rate of 3.8%. A net discrete tax benefit of $6.1 million was recorded in the second quarter of fiscal 2016 primarily related to the revision of prior year fourth quarter valuation allowance calculations on our domestic China business' deferred tax assets. For the quarter ended May 1, 2015, the Company recorded a provision for income taxes from continuing operations of $23.7 million that resulted in an effective tax rate of 29.8%. A net discrete tax expense of $1.2 million was recorded in the second quarter of fiscal 2015.

For the six months ended April 29, 2016, the Company recorded a benefit for income taxes from continuing operations of $17.6 million that resulted in an effective tax rate of 24.0%. A net discrete tax benefit of $7.0 million was recorded in the six months ended April 29, 2016, primarily related to the revision of prior year fourth quarter valuation allowance calculations on our domestic China business' deferred tax assets. For the six months ended May 1, 2015, the Company recorded a provision for income taxes from continuing operations of $38.7 million that resulted in an effective tax rate of 30.9%. A net discrete tax expense of $1.6 million was recorded in the six months ended May 1, 2015.


16.	(Loss) Earnings Per Share

Basic (loss) earnings per share is computed by dividing net (loss) income by the weighted average number of shares outstanding during each period. Diluted (loss) earnings per share is computed similar to basic (loss) earnings per share, except that the weighted average number of shares outstanding is increased to include additional shares from the assumed exercise of stock options, performance shares and restricted stock units, if dilutive.

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

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	Quarter Ended					Six Months Ended
In thousands, except per share amounts	April 29, 2016			May 1, 2015		April 29, 2016			May 1, 2015
Numerator:
Net (loss) income from continuing operations	$	(15,305	)	$	55,958	$	(55,526	)	$	86,483
Income from discontinued operations, net of income taxes	5,466			—		5,466			—
Net (loss) income	$	(9,839	)	$	55,958	$	(50,060	)	$	86,483
Denominator:
Weighted average shares outstanding	97,921			97,416		97,886			97,482
Dilutive effect of stock options, performance shares and restricted stock units	—			556		—			573
Weighted average shares outstanding assuming dilution	97,921			97,972		97,886			98,055

Basic (loss) earnings per share:
(Loss) income from continuing operations	$	(0.16	)	$	0.57	$	(0.57	)	$	0.89
Income from discontinued operations	0.06			—		0.06			—
Net (loss) income	$	(0.10	)	$	0.57	$	(0.51	)	$	0.89

Diluted (loss) earnings per share:
(Loss) income from continuing operations	$	(0.16	)	$	0.57	$	(0.57	)	$	0.88
Income from discontinued operations	0.06			—		0.06			—
Net (loss) income	$	(0.10	)	$	0.57	$	(0.51	)	$	0.88

In the quarter and six months ended April 29, 2016, the computation of weighted average shares outstanding assuming dilution does not include the effect of stock options, performance shares and restricted stock units because a net loss existed from continuing operations and thus the result would have been antidilutive. Weighted average shares outstanding used for diluted earnings per share from both continuing operations and discontinued operations therefore excludes 4.5 million and 4.9 million shares for these antidilutive items as of the quarter and six months ended April 29, 2016, respectively.

Options to purchase a weighted average of 2.7 million shares were excluded from the calculation of diluted earnings per share for continuing operations for the quarter ended May 1, 2015, as the effect would have been antidilutive. Options to purchase a weighted average of 2.5 million shares were excluded from the calculation of diluted earnings per share for continuing operations for the six months ended May 1, 2015, as the effect would have been antidilutive.


17.	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; and

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 29, 2016 and October 30, 2015. As of April 29, 2016 and October 30, 2015, we did not have any Level 3 assets or liabilities.

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Fair Value Measurements as of April 29, 2016
In thousands	Carrying Value		Total Fair Value		Level 1		Level 2
Current Assets
Cash equivalents	$	5,493	$	5,493	$	5,493	$	—
Other Current Assets
Derivatives	$	9,488	$	9,488	$	—	$	9,488
Other Accrued Liabilities
Derivatives	$	20,383	$	20,383	$	—	$	20,383
Long-term Obligations Including Amounts due within One Year
Term Loan due 2019	$	356,250	$	351,618	$	—	$	351,618
5.125% Senior Notes due 2021	$	497,397	$	450,000	$	—	$	450,000
6.625% Senior Notes due 2036	$	148,569	$	123,375	$	—	$	123,375



Fair Value Measurements as of October 30, 2015
In thousands	Carrying Value		Total Fair Value		Level 1		Level 2
Current Assets
Cash equivalents	$	9,831	$	9,831	$	9,831	$	—
Other Current Assets
Derivatives	$	20,267	$	20,267	$	—	$	20,267
Other Accrued Liabilities
Derivatives	$	10,577	$	10,577	$	—	$	10,577
Long-term Obligations Including Amounts due within One Year
Term Loan due 2019	$	375,000	$	373,668	$	—	$	373,668
5.125% Senior Notes due 2021	$	497,195	$	446,680	$	—	$	446,680
6.625% Senior Notes due 2036	$	148,553	$	119,310	$	—	$	119,310
Credit Agreement	$	58,600	$	58,600	—		$	58,600

The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

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

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.

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

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

Credit Agreement: The carrying value of the revolving credit facility approximates fair value based on the short-term nature of these borrowings.


18.	Contingent Liabilities

We establish reserves based on our assessment of contingencies related to legal claims asserted against us, as required by GAAP. Developments during the course of legal proceedings may affect our assessments and estimates of our contingencies, which in turn may require us to record or change the amount of a reserve, or make a payment that is different than the amount that we have reserved. In addition, 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 future consolidated financial position, results of operations or liquidity. During the quarter ended April 29, 2016, we recognized net income from discontinued

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operations of $5.5 million, primarily due to losses on contingencies resulting from our former drilling products business that were no longer considered probable, as well as associated inventory that would no longer be utilized.

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 3,602 asbestos and silica-related cases), employment and commercial matters. We and our subsidiaries also become involved from time to time in proceedings relating to environmental matters and litigation arising outside the ordinary course of business.

As of April 29, 2016, we were contingently liable to banks, financial institutions and others for approximately $129.3 million for outstanding standby letters of credit, surety bonds and bank guarantees to secure the performance of sales contracts and other third party provided guarantees in the ordinary course of business. Of this amount, approximately $11.6 million relates to surety bonds and $5.7 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.

In addition, in the fourth quarter of 2014, we received a subpoena from the SEC's Division of Enforcement concerning our 2012 acquisition of International Mining Machinery Holdings, Limited ("IMM") and related accounting matters. We are cooperating with the SEC regarding this investigation, which is ongoing. While it is not possible to predict the timing or outcome of the SEC inquiry, we currently believe that this matter will not have a material adverse effect on our future consolidated results of operation, financial position, or liquidity.


19.	Segment Information

We operate in two reportable segments: Underground and Surface. Crushing and conveying operating results related to surface applications are reported as part of the Surface segment, while total crushing and conveying operating results are included in the Underground segment. Eliminations primarily consist of the surface applications of crushing and conveying included in both operating segments. The results of operations for Montabert have been included in the Underground segment from its acquisition date forward.

Operating (loss) income of segments does not include interest income and expense, corporate administration expenses, the provision for income taxes, or any impact in the quarter related amortization of the inventory impact of the previous year's fourth quarter mark to market adjustment for our pension and other postretirement benefit plans.



In thousands	Underground			Surface		Corporate			Eliminations			Total
Quarter ended April 29, 2016
Net sales	$	342,603		$	285,104	$	—		$	(25,722	)	$	601,985
Operating (loss) income	$	(20,817	)	$	35,647	$	(11,728	)	$	(7,427	)	$	(4,325	)
Interest income	—			—		858			—			858
Interest expense	—			—		(12,437		)	—			(12,437		)
(Loss) income before income taxes	$	(20,817	)	$	35,647	$	(23,307	)	$	(7,427	)	$	(15,904	)
Depreciation and amortization	$	22,503		$	13,882	$	921		$	—		$	37,306
Capital expenditures	$	8,114		$	4,644	$	233		$	—		$	12,991

Quarter ended May 1, 2015
Net sales	$	423,939		$	423,386	$	—		$	(36,802	)	$	810,523
Operating income (loss)	$	51,476		$	58,837	$	(8,654	)	$	(8,714	)	$	92,945
Interest income	—			—		2,980			—			2,980
Interest expense	—			—		(16,252		)	—			(16,252		)
Income (loss) before income taxes	$	51,476		$	58,837	$	(21,926	)	$	(8,714	)	$	79,673
Depreciation and amortization	$	18,524		$	13,157	$	816		$	—		$	32,497
Capital expenditures	$	5,160		$	12,329	$	48		$	—		$	17,537

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In thousands	Underground			Surface		Corporate			Eliminations			Total
Six months ended April 29, 2016
Net sales	$	617,097		$	561,676	$	—		$	(50,488	)	$	1,128,285
Operating (loss) income	$	(59,267	)	$	43,435	$	(19,257	)	$	(14,323	)	$	(49,412	)
Interest income	—			—		1,665			—			1,665
Interest expense	—			—		(25,360		)	—			(25,360		)
(Loss) income before income taxes	$	(59,267	)	$	43,435	$	(42,952	)	$	(14,323	)	$	(73,107	)
Depreciation and amortization	$	44,923		$	30,623	$	1,847		$	—		$	77,393
Capital expenditures	$	14,888		$	5,733	$	473		$	—		$	21,094

Six months ended May 1, 2015
Net sales	$	808,602		$	770,422	$	—		$	(64,628	)	$	1,514,396
Operating income (loss)	$	93,727		$	90,182	$	(17,336	)	$	(15,170	)	$	151,403
Interest income	—			—		5,920			—			5,920
Interest expense	—			—		(32,149		)	—			(32,149		)
Income (loss) before income taxes	$	93,727		$	90,182	$	(43,565	)	$	(15,170	)	$	125,174
Depreciation and amortization	$	37,712		$	26,946	$	1,518		$	—		$	66,176
Capital expenditures	$	14,221		$	25,433	$	141		$	—		$	39,795


20.	Recent Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-09, Improvements to Employee Share-Based Payment Accounting, which changes how companies account for certain aspects of share-based payments to employees. Companies will be required to recognize the income tax effects of awards in the income statement when the awards vest or are settled (should be applied prospectively). In addition, the guidance eliminates the requirement that excess tax benefits be realized before companies can recognize them (should use a modified retrospective transition method, with a cumulative-effect adjustment to retained earnings). Excess tax benefits will be presented as an operating activity on the statement of cash flows rather than as a financing activity (can be applied either retrospectively or prospectively). The guidance also allows companies to repurchase more of an employee's shares for tax withholding purposes without triggering liability accounting (should use a modified retrospective transition method, with a cumulative-effect adjustment to retained earnings). Companies will classify the cash paid to a tax authority when shares are withheld to satisfy its statutory income tax withholding obligation as a financing activity on its statement of cash flows (should be applied retrospectively). Furthermore, the guidance allows companies to make a policy election to account for forfeitures as they occur (should use a modified retrospective transition method, with a cumulative-effect adjustment to retained earnings). The ASU is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2016. Early adoption is permitted, but all of the guidance must be adopted in the same period. The ASU is effective for the Company beginning on October 28, 2017. We are beginning to evaluate the impact that the adoption of this guidance will have on our financial condition, results of operations and the presentation of our financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires lessees to record most leases on their balance sheets. Lessees initially recognize a lease liability (measured at the present value of the lease payments over the lease term) and a right-of-use ("ROU") asset (measured at the lease liability amount, adjusted for lease prepayments, lease incentives received and the lessee’s initial direct costs). Lessees can make an accounting policy election to not recognize ROU assets and lease liabilities for leases with a lease term of 12 months or less as long as the leases do not include options to purchase the underlying assets that the lessee is reasonably certain to exercise. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The ASU is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Early adoption is permitted for all entities. The ASU is effective for the Company beginning on October 26, 2019 and the standard requires the use of a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Full retrospective application is prohibited. We are continuing to evaluate the impact that the adoption of this guidance will have on our financial condition, results of operations and the presentation of our financial statements.

In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Liabilities, which amends the guidance on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity's accounting related to (1) the classification and measurement of investments in

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equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The most notable disclosure revisions for public companies include: (1) removing the requirement to disclose the methods for and any changes to significant assumptions used to estimate fair value, (2) requiring an "exit" price to be used when disclosing fair values of financial assets and liabilities measured at amortized cost, and (3) requiring entities to disclose either on the balance sheet or in the notes to the financial statements all financial assets and liabilities grouped by measurement category (i.e. amortized cost or fair value through net income or other comprehensive income) and form (i.e. securities, loans, receivables, etc.). The ASU is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. Early adoption is permitted for public entities only as it relates to certain provisions for changes in fair value due to instrument specific credit risk for liabilities measured under the fair value option. The ASU is effective for the Company beginning on October 27, 2018. This guidance is not expected to have a significant impact on our financial condition, results of operations or presentation of our financial statements.

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which requires entities to present deferred tax assets and deferred tax liabilities as noncurrent in a classified balance sheet. The ASU simplifies the current guidance, which requires entities to separately present deferred tax assets and deferred tax liabilities as current and noncurrent in a classified balance sheet. The ASU may be applied either prospectively or retrospectively. The ASU is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. In order to reduce complexities in financial reporting, the Company early adopted the guidance on a prospective basis in fiscal 2016. Prior balance sheets were not retrospectively adjusted. This guidance did not have a significant impact on our financial condition, results of operations or presentation of our financial statements.

In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, which eliminates the requirement for an acquirer in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determined the amounts, including the effect on earnings of any amounts they would have recorded in previous periods if the accounting had been completed at the acquisition date. The ASU is applied prospectively to adjustments to provisional amounts that occur after the effective date. The ASU is effective for the Company on October 29, 2016, with early adoption permitted. This guidance is not expected to have a significant impact on our financial condition, results of operations or presentation of our financial statements.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory, which requires entities to measure inventories at the lower of cost or net realizable value ("NRV"). This simplifies the evaluation from the current method of lower of cost or market, where market is based on one of three measures (i.e. replacement cost, net realizable value, or net realizable value less a normal profit margin). The ASU does not apply to inventories measured under the last-in, first-out method or the retail inventory method, and defines NRV as the "estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation." The ASU is effective on a prospective basis for the Company beginning on October 28, 2017, with early adoption permitted. This guidance is not expected to have a significant impact on our financial condition, results of operations or presentation of our financial statements.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, which changes the presentation of debt issuance costs in the financial statements. Under the ASU, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. Further, in June 2015, the FASB agreed to clarify guidance from the SEC on the presentation of debt issuance costs on revolving debt arrangements, permitting entities to elect that such costs be classified as an asset. The guidance in the ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is allowed for all entities for financial statements that have not been previously issued and entities would apply the new guidance retrospectively to all prior periods. ASU 2015-03 will be effective for the Company beginning on October 29, 2016. This guidance is not expected to have a significant impact on our financial condition, results of operations or presentation of our financial statements.

In May 2014, the FASB issued ASU No. 2014-09 Revenue from Contracts with Customers. ASU 2014-09 provides a single principles-based, five-step model to be applied to all contracts with customers. The five steps are to (i) identify the contracts with the customer, (ii) identify the performance obligations in the contact, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when each performance obligation is satisfied. Revenue will be recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. In July 2015, the FASB agreed to delay the effective date of ASU 2014-09 for one year and to permit early adoption by entities as of the original effective dates. Considering the one year deferral, ASU 2014-09 will be effective for the Company beginning on October 27, 2018 and the standard allows for either full retrospective adoption or modified retrospective adoption. We are continuing to evaluate the impact that the adoption of this guidance will have on our financial condition, results of operations and the presentation of our financial statements.


21.	Subsidiary Guarantors for Credit Agreement, Term Loan and 2021 Notes

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The following tables present condensed consolidated financial information as of April 29, 2016 and October 30, 2015 and for the quarters and six months ended April 29, 2016 and May 1, 2015 for: (a) the Company; (b) on a combined basis, the guarantors of the Credit Agreement, the Term Loan and the 2021 Notes issued in October 2011, which include Joy Global Underground Mining LLC, Joy Global Surface Mining Inc, N.E.S. Investment Co., Joy Global Conveyors Inc. and Joy Global Longview Operations LLC (the "Subsidiary Guarantors"); and (c) on a combined basis, the non-guarantors, which include all of the Company's 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 Subsidiary Guarantors, which are direct and indirect 100% 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.

Condensed Consolidating Statement of Operations Quarter ended April 29, 2016

In thousands	Parent Company			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	293,527		$	499,988		$	(191,530	)	$	601,985
Cost of sales	—			235,632			368,876			(146,029		)	458,479
Product development, selling and administrative expenses	12,067			46,446			58,130			—			116,643
Restructuring expenses	—			7,181			26,213			—			33,394
Other (income) expense	—			1,851			(4,057		)	—			(2,206		)
Operating (loss) income	(12,067		)	2,417			50,826			(45,501		)	(4,325		)
Intercompany items	15,115			(144,618		)	141,975			(12,472		)	—
Interest (expense) income, net	(12,580		)	219			782			—			(11,579		)
(Loss) income before income taxes and equity in income of subsidiaries	(9,532		)	(141,982		)	193,583			(57,973		)	(15,904		)
(Benefit) provision for income taxes	(4,648		)	(9,487		)	13,536			—			(599		)
Equity in (loss) income of subsidiaries	(10,421		)	115,423			—			(105,002		)	—
Net (loss) income from continuing operations	$	(15,305	)	$	(17,072	)	$	180,047		$	(162,975	)	$	(15,305	)

Comprehensive income (loss)	$	27,925		$	(16,110	)	$	225,658		$	(209,548	)	$	27,925

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Condensed Consolidating Statement of Operations Quarter ended May 1, 2015

In thousands	Parent Company			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	529,826		$	530,864		$	(250,167	)	$	810,523
Cost of sales	(3,177		)	387,034			378,686			(186,317		)	576,226
Product development, selling and administrative expenses	11,458			60,132			59,552			—			131,142
Restructuring expenses	252			5,622			5,236			—			11,110
Other (income) expense	68			4,461			(5,429		)	—			(900		)
Operating income (loss)	(8,601		)	72,577			92,819			(63,850		)	92,945
Intercompany items	16,586			(21,509		)	(22,401		)	27,324			—
Interest (expense) income, net	(15,783		)	1,646			865			—			(13,272		)
Income (loss) before income taxes and equity in income of subsidiaries	(7,798		)	52,714			71,283			(36,526		)	79,673
Provision (benefit) for income taxes	(6,175		)	21,495			8,395			—			23,715
Equity in income of subsidiaries	57,581			13,735			—			(71,316		)	—
Net income from continuing operations	$	55,958		$	44,954		$	62,888		$	(107,842	)	$	55,958

Comprehensive income	$	64,059		$	43,230		$	83,087		$	(126,317	)	$	64,059

Condensed Consolidating Statement of Operations Six months ended April 29, 2016


In thousands	Parent Company			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	557,125		$	890,737		$	(319,577	)	$	1,128,285
Cost of sales	—			468,637			678,210			(250,112		)	896,735
Product development, selling and administrative expenses	19,447			87,125			120,484			—			227,056
Restructuring expenses	395			27,197			32,461			—			60,053
Other (income) expense	—			1,157			(7,304		)	—			(6,147		)
Operating (loss) income	(19,842		)	(26,991		)	66,886			(69,465		)	(49,412		)
Intercompany items	30,263			(192,352		)	135,904			26,185			—
Interest (expense) income, net	(25,300		)	454			1,151			—			(23,695		)
(Loss) income before income taxes and equity in income of subsidiaries	(14,879		)	(218,889		)	203,941			(43,280		)	(73,107		)
(Benefit) provision for income taxes	(16,153		)	(9,075		)	7,647			—			(17,581		)
Equity in (loss) income of subsidiaries	(56,800		)	133,320			—			(76,520		)	—
Net (loss) income from continuing operations	$	(55,526	)	$	(76,494	)	$	196,294		$	(119,800	)	$	(55,526	)

Comprehensive (loss) income	$	(44,659	)	$	(76,811	)	$	207,250		$	(130,439	)	$	(44,659	)

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Condensed Consolidating Statement of Operations Six months ended May 1, 2015


In thousands	Parent Company			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	969,418		$	1,005,436		$	(460,458	)	$	1,514,396
Cost of sales	(6,354		)	706,588			743,277			(349,715		)	1,093,796
Product development, selling and administrative expenses	23,250			109,508			128,777			—			261,535
Restructuring expenses	252			5,841			5,682			—			11,775
Other (income) expense	68			9,101			(13,282		)	—			(4,113		)
Operating income (loss)	(17,216		)	138,380			140,982			(110,743		)	151,403
Intercompany items	33,356			(45,217		)	(28,441		)	40,302			—
Interest (expense) income, net	(31,381		)	3,335			1,817			—			(26,229		)
Income (loss) before income taxes and equity in income of subsidiaries	(15,241		)	96,498			114,358			(70,441		)	125,174
Provision for income taxes	14,138			24,505			48			—			38,691
Equity in income of subsidiaries	115,862			15,369			—			(131,231		)	—
Net income from continuing operations	$	86,483		$	87,362		$	114,310		$	(201,672	)	$	86,483

Comprehensive (loss) income	$	(22,415	)	$	87,047		$	7,149		$	(94,196	)	$	(22,415	)

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Condensed Consolidating Balance Sheet As of April 29, 2016

In thousands	Parent Company			Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	24,053		$	381	$	136,444	$	—		$	160,878
Accounts receivable, net	—			135,973		547,589		(13,186		)	670,376
Inventories	—			452,855		579,188		(92,180		)	939,863
Other current assets	38,603			11,342		73,088		—			123,033
Assets held for sale	—			30,995		30		—			31,025
Total current assets	62,656			631,546		1,336,339		(105,366		)	1,925,175
Property, plant and equipment, net	19,944			245,198		456,229		(5,016		)	716,355
Other assets:
Other intangible assets, net	—			196,223		39,882		—			236,105
Goodwill	—			342,003		8,872		—			350,875
Deferred income taxes	97,443			—		55,565		—			153,008
Other non-current assets	2,459,682			1,966,109		3,183,563		(7,482,772		)	126,582
Total other assets	2,557,125			2,504,335		3,287,882		(7,482,772		)	866,570
Total assets	$	2,639,725		$	3,381,079	$	5,080,450	$	(7,593,154	)	$	3,508,100
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings, including current portion of long-term obligations	$	18,750		$	—	$	4,603	$	—		$	23,353
Trade accounts payable	1,976			83,956		154,965		3			240,900
Employee compensation and benefits	6,577			33,436		43,710		—			83,723
Advance payments and progress billings	—			88,644		152,098		(15,575		)	225,167
Accrued warranties	—			16,022		30,959		—			46,981
Other accrued liabilities	79,342			53,781		81,837		(8,156		)	206,804
Current liabilities of discontinued operations	—			—		—		—			—
Total current liabilities	106,645			275,839		468,172		(23,728		)	826,928
Long-term obligations	983,466			—		22		—			983,488
Other liabilities:
Liabilities for postretirement benefits	18,659			—		—		—			18,659
Accrued pension costs	167,999			—		—		—			167,999
Other non-current liabilities	(16,811		)	10,063		138,007		—			131,259
Total other liabilities	169,847			10,063		138,007		—			317,917
Shareholders’ equity	1,379,767			3,095,177		4,474,249		(7,569,426		)	1,379,767
Total liabilities and shareholders’ equity	$	2,639,725		$	3,381,079	$	5,080,450	$	(7,593,154	)	$	3,508,100

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Condensed Consolidating Balance Sheet As of October 30, 2015

In thousands	Parent Company		Subsidiary Guarantors		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	581	$	2,008	$	100,296	$	—		$	102,885
Accounts receivable, net	—		214,381		597,826		(134		)	812,073
Inventories	—		508,774		607,461		(108,310		)	1,007,925
Other current assets	58,441		15,610		71,508		—			145,559
Total current assets	59,022		740,773		1,377,091		(108,444		)	2,068,442
Property, plant and equipment, net	21,318		297,476		478,253		(5,015		)	792,032
Other assets:
Other intangible assets, net	—		207,891		47,819		—			255,710
Goodwill	—		346,348		8,273		—			354,621
Deferred income taxes	49,660		—		69,253		—			118,913
Other non-current assets	2,740,518		2,078,294		2,517,110		(7,213,194		)	122,728
Total other assets	2,790,178		2,632,533		2,642,455		(7,213,194		)	851,972
Total assets	$	2,870,518	$	3,670,782	$	4,497,799	$	(7,326,653	)	$	3,712,446
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings, including current portion of long-term obligations	$	18,750	$	—	$	7,571	$	—		$	26,321
Trade accounts payable	3,342		96,891		175,556		—			275,789
Employee compensation and benefits	5,843		36,527		47,965		—			90,335
Advance payments and progress billings	—		100,312		149,795		(20,637		)	229,470
Accrued warranties	—		19,027		33,119		—			52,146
Other accrued liabilities	76,650		60,228		100,660		(12,261		)	225,277
Current liabilities of discontinued operations	—		11,582		—		—			11,582
Total current liabilities	104,585		324,567		514,666		(32,898		)	910,920
Long-term obligations	1,060,598		—		45		—			1,060,643
Other liabilities:
Liabilities for postretirement benefits	18,662		878		—		—			19,540
Accrued pension costs	159,594		8,406		7,699		—			175,699
Other non-current liabilities	81,595		8,325		35,715		—			125,635
Total other liabilities	259,851		17,609		43,414		—			320,874
Shareholders’ equity	1,445,484		3,328,606		3,939,674		(7,293,755		)	1,420,009
Total liabilities and shareholders’ equity	$	2,870,518	$	3,670,782	$	4,497,799	$	(7,326,653	)	$	3,712,446

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Condensed Consolidating Statement of Cash Flows Six months ended April 29, 2016

In thousands	Parent Company			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Consolidated
Operating Activities:
Net cash provided (used) by operating activities	$	104,280		$	(4,460	)	$	52,951		$	152,771
Investing Activities:
Property, plant and equipment acquired	(473		)	(5,359		)	(15,262		)	(21,094		)
Proceeds from sale of property, plant and equipment	—			8,192			2,395			10,587
Other investing activities, net	3			—			—			3
Net cash (used) provided by investing activities	(470		)	2,833			(12,867		)	(10,504		)
Financing Activities:
Dividends paid	(1,977		)	—			—			(1,977		)
Repayments of term loan	(18,750		)	—			—			(18,750		)
Payments on credit agreement	(58,600		)	—			—			(58,600		)
Repayments of short-term debt	—			—			(3,165		)	(3,165		)
Financing fees	(1,011		)	—			—			(1,011		)
Net cash used by financing activities	(80,338		)	—			(3,165		)	(83,503		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			(771		)	(771		)
Increase (Decrease) in Cash and Cash Equivalents	23,472			(1,627		)	36,148			57,993
Cash and Cash Equivalents at Beginning of Period	581			2,008			100,296			102,885
Cash and Cash Equivalents at End of Period	$	24,053		$	381		$	136,444		$	160,878

Condensed Consolidating Statement of Cash Flows Six months ended May 1, 2015

In thousands	Parent Company			Subsidiary Guarantors			Non-Guarantor Subsidiaries			Consolidated
Operating Activities:
Net cash provided (used) by operating activities	95,153			(3,468		)	(38,924		)	52,761
Investing Activities:
Property, plant and equipment acquired	(141		)	(12,680		)	(26,974		)	(39,795		)
Proceeds from sale of property, plant and equipment	942			133			2,883			3,958
Other investing activities, net	(1,203		)	—			1,576			373
Net cash used by investing activities	(402		)	(12,547		)	(22,515		)	(35,464		)
Financing Activities:
Common stock issued	2,560			—			—			2,560
Dividends paid	(38,964		)	—			—			(38,964		)
Treasury stock purchased	(50,000		)	—			—			(50,000		)
Other financing activities, net	261			684			(80		)	865
Net cash (used) provided by financing activities	(86,143		)	684			(80		)	(85,539		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			(9,858		)	(9,858		)
(Decrease) Increase in Cash and Cash Equivalents	8,608			(15,331		)	(71,377		)	(78,100		)
Cash and Cash Equivalents at Beginning of Period	54,874			16,429			198,888			270,191
Cash and Cash Equivalents at End of Period	$	63,482		$	1,098		$	127,511		$	192,091


22.	Subsidiary Guarantors for 2036 Notes

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The following tables present condensed consolidated financial information as of April 29, 2016 and October 30, 2015 and for the quarters and six months ended April 29, 2016 and May 1, 2015 for: (a) the Company; (b) on a combined basis, the guarantors of the 2036 Notes issued in November 2006, which include Joy Global Underground Mining LLC, Joy Global Surface Mining Inc, N.E.S. Investment Co., Joy Global Conveyors Inc., Joy Global Longview Operations LLC and certain immaterial wholly owned subsidiaries of Joy Global Longview Operations LLC (the "Supplemental Subsidiary Guarantors"); and (c) on a combined basis, the non-guarantors, which include all of the Company's foreign subsidiaries and a number of small domestic subsidiaries (the "Supplemental 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 100% 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.

Condensed Consolidating Statement of Operations Quarter ended April 29, 2016

In thousands	Parent Company			Supplemental Subsidiary Guarantors			Supplemental Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	295,606		$	497,909		$	(191,530	)	$	601,985
Cost of sales	—			237,183			367,325			(146,029		)	458,479
Product development, selling and administrative expenses	12,067			46,752			57,824			—			116,643
Restructuring expenses	—			7,181			26,213			—			33,394
Other (income) expense	—			1,843			(4,049		)	—			(2,206		)
Operating (loss) income	(12,067		)	2,647			50,596			(45,501		)	(4,325		)
Intercompany items	15,115			(144,618		)	141,975			(12,472		)	—
Interest (expense) income, net	(12,580		)	227			774			—			(11,579		)
(Loss) income before income taxes and equity in income of subsidiaries	(9,532		)	(141,744		)	193,345			(57,973		)	(15,904		)
(Benefit) provision for income taxes	(4,648		)	(9,479		)	13,528			—			(599		)
Equity in (loss) income of subsidiaries	(10,421		)	115,191			—			(104,770		)	—
Net (loss) income from continuing operations	$	(15,305	)	$	(17,074	)	$	179,817		$	(162,743	)	$	(15,305	)

Comprehensive income (loss)	$	27,925		$	(16,110	)	$	225,426		$	(209,316	)	$	27,925

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Condensed Consolidating Statement of Operations Quarter ended May 1, 2015

In thousands	Parent Company			Supplemental Subsidiary Guarantors			Supplemental Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	531,706		$	528,984		$	(250,167	)	$	810,523
Cost of sales	(3,177		)	388,885			376,835			(186,317		)	576,226
Product development, selling and administrative expenses	11,458			60,132			59,552			—			131,142
Restructuring expenses	252			5,622			5,236			—			11,110
Other (income) expense	68			4,457			(5,425		)	—			(900		)
Operating income (loss)	(8,601		)	72,610			92,786			(63,850		)	92,945
Intercompany items	16,586			(21,509		)	(22,401		)	27,324			—
Interest (expense) income, net	(15,783		)	1,502			1,009			—			(13,272		)
Income (loss) before income taxes and equity in income of subsidiaries	(7,798		)	52,603			71,394			(36,526		)	79,673
Provision (benefit) for income taxes	(6,175		)	21,495			8,395			—			23,715
Equity in income of subsidiaries	57,581			13,528			—			(71,109		)	—
Net income from continuing operations	$	55,958		$	44,636		$	62,999		$	(107,635	)	$	55,958

Comprehensive income	$	64,059		$	42,912		$	83,198		$	(126,110	)	$	64,059

Condensed Consolidating Statement of Operations Six months ended April 29, 2016


In thousands	Parent Company			Supplemental Subsidiary Guarantors			Supplemental Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	561,035		$	886,827		$	(319,577	)	$	1,128,285
Cost of sales	—			471,893			674,954			(250,112		)	896,735
Product development, selling and administrative expenses	19,447			87,431			120,178			—			227,056
Restructuring expenses	395			27,197			32,461			—			60,053
Other (income) expense	—			1,146			(7,293		)	—			(6,147		)
Operating (loss) income	(19,842		)	(26,632		)	66,527			(69,465		)	(49,412		)
Intercompany items	30,263			(192,352		)	135,904			26,185			—
Interest (expense) income, net	(25,300		)	475			1,130			—			(23,695		)
(Loss) income before income taxes and equity in income of subsidiaries	(14,879		)	(218,509		)	203,561			(43,280		)	(73,107		)
(Benefit) provision for income taxes	(16,153		)	(9,330		)	7,902			—			(17,581		)
Equity in (loss) income of subsidiaries	(56,800		)	132,684			—			(75,884		)	—
Net (loss) income from continuing operations	$	(55,526	)	$	(76,495	)	$	195,659		$	(119,164	)	$	(55,526	)

Comprehensive (loss) income	$	(44,659	)	$	(76,811	)	$	206,614		$	(129,803	)	$	(44,659	)

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Condensed Consolidating Statement of Operations Six months ended May 1, 2015


In thousands	Parent Company			Supplemental Subsidiary Guarantors			Supplemental Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	972,781		$	1,002,073		$	(460,458	)	$	1,514,396
Cost of sales	(6,354		)	710,091			739,774			(349,715		)	1,093,796
Product development, selling and administrative expenses	23,250			109,508			128,777			—			261,535
Restructuring expenses	252			5,841			5,682			—			11,775
Other (income) expense	68			9,094			(13,275		)	—			(4,113		)
Operating income (loss)	(17,216		)	138,247			141,115			(110,743		)	151,403
Intercompany items	33,356			(45,217		)	(28,441		)	40,302			—
Interest (expense) income, net	(31,381		)	3,136			2,016			—			(26,229		)
Income (loss) before income taxes and equity in income of subsidiaries	(15,241		)	96,166			114,690			(70,441		)	125,174
Provision for income taxes	14,138			24,491			62			—			38,691
Equity in income of subsidiaries	115,862			15,369			—			(131,231		)	—
Net income from continuing operations	$	86,483		$	87,044		$	114,628		$	(201,672	)	$	86,483

Comprehensive (loss) income	$	(22,415	)	$	86,729		$	7,467		$	(94,196	)	$	(22,415	)

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Condensed Consolidating Balance Sheet As of April 29, 2016

In thousands	Parent Company			Supplemental Subsidiary Guarantors		Supplemental Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	24,053		$	598	$	136,227	$	—		$	160,878
Accounts receivable, net	—			136,899		546,663		(13,186		)	670,376
Inventories	—			458,321		573,722		(92,180		)	939,863
Other current assets	38,603			12,087		72,343		—			123,033
Assets held for sale	—			30,995		30		—			31,025
Total current assets	62,656			638,900		1,328,985		(105,366		)	1,925,175
Property, plant and equipment, net	19,944			246,660		454,767		(5,016		)	716,355
Other assets:
Other intangible assets, net	—			196,223		39,882		—			236,105
Goodwill	—			342,003		8,872		—			350,875
Deferred income taxes	97,443			—		55,565		—			153,008
Other non-current assets	2,459,682			1,994,677		3,154,995		(7,482,772		)	126,582
Total other assets	2,557,125			2,532,903		3,259,314		(7,482,772		)	866,570
Total assets	$	2,639,725		$	3,418,463	$	5,043,066	$	(7,593,154	)	$	3,508,100
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings, including current portion of long-term obligations	$	18,750		$	—	$	4,603	$	—		$	23,353
Trade accounts payable	1,976			84,169		154,752		3			240,900
Employee compensation and benefits	6,577			33,542		43,604		—			83,723
Advance payments and progress billings	—			88,698		152,044		(15,575		)	225,167
Accrued warranties	—			16,022		30,959		—			46,981
Other accrued liabilities	79,342			53,806		81,811		(8,155		)	206,804
Current liabilities of discontinued operations	—			—		—		—			—
Total current liabilities	106,645			276,237		467,773		(23,727		)	826,928
Long-term obligations	983,466			—		22		—			983,488
Other liabilities:
Liabilities for postretirement benefits	18,659			—		—		—			18,659
Accrued pension costs	167,999			—		—		—			167,999
Other non-current liabilities	(16,811		)	10,063		138,007		—			131,259
Total other liabilities	169,847			10,063		138,007		—			317,917
Shareholders’ equity	1,379,767			3,132,163		4,437,264		(7,569,427		)	1,379,767
Total liabilities and shareholders’ equity	$	2,639,725		$	3,418,463	$	5,043,066	$	(7,593,154	)	$	3,508,100

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Condensed Consolidating Balance Sheet As of October 30, 2015

In thousands	Parent Company		Supplemental Subsidiary Guarantors		Supplemental Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	581	$	2,008	$	100,296	$	—		$	102,885
Accounts receivable, net	—		214,381		597,826		(134		)	812,073
Inventories	—		508,774		607,461		(108,310		)	1,007,925
Other current assets	58,441		15,610		71,508		—			145,559
Total current assets	59,022		740,773		1,377,091		(108,444		)	2,068,442
Property, plant and equipment, net	21,318		297,476		478,253		(5,015		)	792,032
Other assets:
Other intangible assets, net	—		207,891		47,819		—			255,710
Goodwill	—		346,348		8,273		—			354,621
Deferred income taxes	49,660		—		69,253		—			118,913
Other non-current assets	2,740,518		2,078,294		2,517,110		(7,213,194		)	122,728
Total other assets	2,790,178		2,632,533		2,642,455		(7,213,194		)	851,972
Total assets	$	2,870,518	$	3,670,782	$	4,497,799	$	(7,326,653	)	$	3,712,446
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings, including current portion of long-term obligations	$	18,750	$	—	$	7,571	$	—		$	26,321
Trade accounts payable	3,342		96,891		175,556		—			275,789
Employee compensation and benefits	5,843		36,527		47,965		—			90,335
Advance payments and progress billings	—		100,312		149,795		(20,637		)	229,470
Accrued warranties	—		19,027		33,119		—			52,146
Other accrued liabilities	76,650		60,228		100,660		(12,261		)	225,277
Current liabilities of discontinued operations	—		11,582		—		—			11,582
Total current liabilities	104,585		324,567		514,666		(32,898		)	910,920
Long-term obligations	1,060,598		—		45		—			1,060,643
Other liabilities:
Liabilities for postretirement benefits	18,662		878		—		—			19,540
Accrued pension costs	159,594		8,406		7,699		—			175,699
Other non-current liabilities	81,595		8,325		35,715		—			125,635
Total other liabilities	259,851		17,609		43,414		—			320,874
Shareholders’ equity	1,445,484		3,328,606		3,939,674		(7,293,755		)	1,420,009
Total liabilities and shareholders’ equity	$	2,870,518	$	3,670,782	$	4,497,799	$	(7,326,653	)	$	3,712,446

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Condensed Consolidating Statement of Cash Flows Six months ended April 29, 2016

In thousands	Parent Company			Supplemental Subsidiary Guarantors			Supplemental Non-Guarantor Subsidiaries			Consolidated
Operating Activities:
Net cash provided (used) by operating activities	$	104,280		$	(4,243	)	$	52,734		$	152,771
Investing Activities:
Property, plant and equipment acquired	(473		)	(5,359		)	(15,262		)	(21,094		)
Proceeds from sale of property, plant and equipment	—			8,192			2,395			10,587
Other investing activities, net	3			—			—			3
Net cash (used) provided by investing activities	(470		)	2,833			(12,867		)	(10,504		)
Financing Activities:
Dividends paid	(1,977		)	—			—			(1,977		)
Repayments of term loan	(18,750		)	—			—			(18,750		)
Payments on credit agreement	(58,600		)	—			—			(58,600		)
Repayments of short-term debt	—			—			(3,165		)	(3,165		)
Financing fees	(1,011		)	—			—			(1,011		)
Net cash used by financing activities	(80,338		)	—			(3,165		)	(83,503		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			(771		)	(771		)
Increase (Decrease) in Cash and Cash Equivalents	23,472			(1,410		)	35,931			57,993
Cash and Cash Equivalents at Beginning of Period	581			2,008			100,296			102,885
Cash and Cash Equivalents at End of Period	$	24,053		$	598		$	136,227		$	160,878

Condensed Consolidating Statement of Cash Flow Six months ended May 1, 2015

In thousands	Parent Company			Supplemental Subsidiary Guarantors			Supplemental Non-Guarantor Subsidiaries			Consolidated
Operating Activities:
Net cash provided (used) by operating activities	95,153			(2,678		)	(39,714		)	52,761
Investing Activities:
Property, plant and equipment acquired	(141		)	(12,680		)	(26,974		)	(39,795		)
Proceeds from sale of property, plant and equipment	942			133			2,883			3,958
Other investing activities, net	(1,203		)	—			1,576			373
Net cash used by investing activities	(402		)	(12,547		)	(22,515		)	(35,464		)
Financing Activities:
Common stock issued	2,560			—			—			2,560
Dividends paid	(38,964		)	—			—			(38,964		)
Treasury stock purchased	(50,000		)	—			—			(50,000		)
Other financing activities, net	261			684			(80		)	865
Net cash (used) provided by financing activities	(86,143		)	684			(80		)	(85,539		)
Effect of Exchange Rate Changes on Cash and Cash Equivalents	—			—			(9,858		)	(9,858		)
(Decrease) Increase in Cash and Cash Equivalents	8,608			(14,541		)	(72,167		)	(78,100		)
Cash and Cash Equivalents at Beginning of Period	54,874			16,429			198,888			270,191
Cash and Cash Equivalents at End of Period	$	63,482		$	1,888		$	126,721		$	192,091

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23.	Subsequent Events

On June 2, 2016, our Board of Directors declared a cash dividend of $0.01 per outstanding share of common stock. The dividend will be paid on July 6, 2016 to all shareholders of record at the close of business on June 22, 2016.

Additionally, subsequent to the end of the quarter, we undertook further actions related to our restructuring programs, including idling another facility in China and closing a manufacturing facility in North America. As a result of these actions, we expect to incur additional employee severance and termination costs and accelerated depreciation in our fiscal third quarter. These costs are included in our forecasted costs in Note 12, Restructuring Charges.

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

The following discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes to the Condensed Consolidated Financial Statements in Item 1 of this Quarterly Report on Form 10-Q.

Overview

Joy Global Inc. is a leading manufacturer and servicer of high productivity mining equipment for the extraction of metals and minerals. We manufacture and market original equipment and parts and perform services for both underground and surface mining, as well as certain industrial applications. Our equipment is used in major mining regions throughout the world to mine coal, copper, iron ore, oil sands, gold and other minerals. We operate in two business segments: Underground and Surface. We are a major manufacturer of underground mining machinery for the extraction and haulage of coal and other bedded minerals. We are also a major producer of surface mining equipment for the extraction and haulage of copper, coal and other minerals and ores. We offer comprehensive direct service, which includes our smart service offerings, near major mining regions worldwide and provide extensive operational support for many types of equipment used in mining. Our principal manufacturing facilities are located in the United States, including facilities in Alabama, Texas and Wisconsin, and internationally, including facilities in Australia, Canada, China, France, South Africa and the United Kingdom.

Operating Results

Quarter Ended April 29, 2016 Compared With Quarter Ended May 1, 2015

Net sales in the second quarter of fiscal 2016 were $602.0 million, compared to $810.5 million in the second quarter of fiscal 2015. The decrease in net sales of $208.5 million, or 26%, in the current year second quarter reflected a decrease in original equipment sales of $76.2 million, or 35%, and a decrease in service sales of $132.3 million, or 22%. Original equipment sales declined in all regions except North America and Australia. The decrease in original equipment sales was led by Latin America, which declined by $58.1 million. Service sales declined in all regions except Eurasia and Australia. The decrease in service sales was led by North America, which declined by $143.4 million. Compared to the prior year second quarter, net sales in the second quarter of fiscal 2016 included a $24.5 million unfavorable effect of foreign currency translation, due primarily to the decline in the value of the South African rand relative to the U.S. dollar.

Operating loss in the second quarter of fiscal 2016 was $4.3 million, or 0.7% of net sales, compared to operating income of $92.9 million, or 11.5% of net sales, in the second quarter of fiscal 2015. The decrease in operating income of $97.3 million, or 105%, in the second quarter of fiscal 2016 was primarily due to lower sales volumes of $81.9 million, higher restructuring charges of $21.0 million and lower net manufacturing cost absorption of $19.4 million. These items were partially offset by lower product development, selling, and administrative expenses of $14.5 million and favorable period costs (defined as any costs of sales other than those costs associated with selling inventory at standard costs) of $10.0 million.

Net loss from continuing operations was $15.3 million, or $0.16 per diluted share, in the second quarter of fiscal 2016, compared to net income of $56.0 million, or $0.57 per diluted share, in the second quarter of fiscal 2015.

Bookings in the second quarter of fiscal 2016 were $680.6 million, compared to $744.8 million in the second quarter of fiscal 2015. The decrease in bookings of $64.1 million, or 9%, in the second quarter of fiscal 2016 reflected an increase in original equipment bookings of $17.4 million, or 12%, and a decrease in service bookings of $81.5 million, or 14%. Original equipment bookings declined in all regions except Eurasia and North America, which increased by $53.0 million and $36.9 million, respectively. Service bookings decreased in all regions except Eurasia and Africa. The decline in service sales was led by North America, which decreased by $105.4 million. Compared to the prior year second quarter, bookings in the second quarter of fiscal 2016 included an $8.4 million unfavorable effect of foreign currency translation, due primarily to the decline in the value of the South African rand relative to the U.S. dollar.

Six Months Ended April 29, 2016 Compared With Six Months Ended May 1, 2015

Net sales in the first six months of fiscal 2016 were $1.1 billion, compared to $1.5 billion in the first six months of fiscal 2015. The decrease in net sales of $386.1 million, or 25%, in the first six months of the current year reflected a decrease in original equipment sales of $149.2 million, or 37%, and a decrease in service sales of $236.9 million, or 21%. Original equipment sales decreased in all regions except North America and Australia. The decrease in original equipment sales was led by Latin America, which decreased by $87.8 million. Service sales decreased in all regions except Eurasia and Australia. The decrease in service sales was led by North America, which decreased by $222.8 million. Compared to the first six months of the prior year, net sales in the first six months of fiscal 2016 included a $55.2 million unfavorable effect of foreign currency translation, due primarily to the decline in the value of the South African rand and Australian dollar relative to the U.S. dollar.

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Operating loss in the first six months of fiscal 2016 was $49.4 million, or 4.4% of net sales, compared to operating income of $151.4 million, or 10.0% of net sales, in the first six months of fiscal 2015. The decrease in operating income of $200.8 million, or 133%, in the first six months of the current year was primarily due to lower sales volumes of $149.2 million, higher restructuring charges of $47.0 million, lower net manufacturing cost absorption of $36.7 million and less favorable product mix of $17.4 million. These items were partially offset by lower product development, selling, and administrative expenses of $34.5 million and favorable period costs of $15.5 million.

Net loss from continuing operations was $55.5 million, or $0.57 per diluted share, in the first six months of fiscal 2016, compared to net income of $86.5 million, or $0.88 per diluted share, in the first six months of fiscal 2015.

Bookings in the first six months of fiscal 2016 were $1.2 billion, compared to $1.4 billion in the first six months of fiscal 2015. The decrease in bookings of $214.5 million, or 15%, in the first six months of the current year reflected a decrease in original equipment bookings of $40.4 million, or 12%, and a decrease in service bookings of $174.0 million, or 16%. Original equipment bookings decreased in all regions except Eurasia and Australia. The decrease in original equipment bookings was led by China and Latin America, which decreased by $44.1 million and $38.0 million, respectively. Service bookings decreased in all regions except Eurasia. The decrease in service bookings was led by North America which decreased by $192.3 million. Compared to the first six months of the prior year, bookings in the first six months of fiscal 2016 included a $58.3 million unfavorable effect of foreign currency translation, due primarily to the decline in the value of the South African rand relative to the U.S. dollar.

Market Outlook

Global economic growth slowed during the first four months of calendar 2016 as challenges in emerging markets were met by slowing growth in the U.S. and Europe. At the same time, mixed economic signals, primarily from China, suggest that there could be a possible near-term improvement in economic output. While sentiment from China was partially responsible for improving certain commodity prices during April, global growth for the year is now expected to track at a marginal decline from 2015.

Copper markets have stabilized in recent weeks as production curtailments have resulted in rising prices since the beginning of the year. Current spot prices are above their January lows driven in part by positive macroeconomic data from China, strong Chinese imports, and the expectation of further stimulus efforts. Copper prices are expected to remain around current levels over the remainder of the calendar year.

U.S. coal markets continue to be the most challenged end-market for the company. Sustained low natural gas prices, elevated coal stockpiles, a mild winter and environmental regulatory considerations have resulted in U.S. coal production declining through mid-May. Although natural gas prices are expected to increase during the second half of the year, high coal inventories will likely result in coal production declining for the full year worse than previously forecasted.

Oil markets have rebounded in recent months. An improved demand outlook along with a reduction in U.S. production has contributed to rising oil prices. Also contributing to the rise in prices was the expected impact of the Canada forest fires on oil sands production out of Alberta. Current estimates expect that roughly half of the daily output of the region was expected to be impacted for a period of two to three weeks. While many sites have begun production, it is unclear the time frame it will take for the region to return to full production levels.

Despite steel production being down through April, conditions are expected to improve over the coming months as the construction season begins and Chinese stimulus efforts increase. The strong sequential rebound in global steel production seen in April helped to drive the second quarter metallurgical coal contract to a two-year high. Current spot prices represent an improvement from December lows and are indicative of a market that is making the necessary adjustments to rebalance supply and demand.

Conditions in iron ore markets improved during April. While margins have improved for many steel producers and sentiment remains positive, iron ore prices have since retreated and are likely to track to a more sustainable range given the increasing seaborne tonnage that is expected to reach the market in the second half of the calendar year.

The mining industry continues to face significant headwinds as commodity markets rebalance. While commodity markets move closer to rebalancing, most major mining companies continue to face strained cash flows and high levels of debt, both of which continue to negatively impact near-term order rates.

Company Outlook

Although market conditions continued to elicit delays in service work, particularly with our U.S. coal customers, we realized several strategic orders during the quarter. As coal production in India continues to grow, we secured orders for a longwall system, room and pillar package and a large parts order for our fleet of shovels operating in India.

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Additionally, we received an order for two of our industry leading electric rope shovels to be used in the Canadian oil sands. Despite the price of oil being down from a year ago, our team was able to demonstrate the technical advantages of our equipment to win the order.

Driving our strategies and demonstrating the differentiation of our products and service offerings remains key to our long-term growth. This strategy has led to successes with our new product development programs, as well as our hard rock and consumables market penetration, and will position us well when markets begin to recover.

Some positive signs have emerged in recent months; however, the mining industry continues to face headwinds from oversupplied commodities and reduced cash flows for most producers. While there has been mounting evidence of supply curtailments, challenging market conditions are likely to persist, requiring us to continue to drive cost out of our business as we position for the current and future demand environments.

Results of Operations

Quarter Ended April 29, 2016 Compared With Quarter Ended May 1, 2015

Net Sales

The following table sets forth the net sales included in our Condensed Consolidated Statements of Operations:



	Quarter Ended
In thousands	April 29, 2016			May 1, 2015			$ Change			% Change
Net Sales
Underground	$	342,603		$	423,939		$	(81,336	)	(19	)
Surface	285,104			423,386			(138,282		)	(33	)
Eliminations	(25,722		)	(36,802		)	11,080
Total Sales	$	601,985		$	810,523		$	(208,538	)	(26	)

Underground net sales in the second quarter of fiscal 2016 were $342.6 million, compared to $423.9 million in the second quarter of fiscal 2015. The decrease in Underground net sales of $81.3 million, or 19%, in the second quarter of fiscal 2016 reflected a decrease in original equipment sales of $5.4 million, or 5%, and a decrease in service sales of $76.0 million, or 24%. Original equipment sales increased in all regions except Africa and China, which declined by $14.5 million and $14.3 million, respectively. Service sales decreased in all regions except Eurasia and Australia. The decline in service sales was led by North America, which decreased by $86.8 million. Compared to the second quarter of fiscal 2015, Underground net sales in the second quarter of fiscal 2016 included an $18.9 million unfavorable effect of foreign currency translation, due primarily to the decline in the value of the South African rand relative to the U.S. dollar.

Surface net sales in the second quarter of fiscal 2016 were $285.1 million, compared to $423.4 million in the second quarter of fiscal 2015. The decrease in Surface net sales of $138.3 million, or 33%, in the second quarter of fiscal 2016 reflected a decrease in original equipment sales of $76.2 million, or 64%, and a decrease in service sales of $62.0 million, or 20%. Original equipment sales declined in all regions except North America. The decrease in original equipment sales was led by Latin America, which declined by $58.1 million. Service sales decreased in all regions except Eurasia. The decline in service sales was led by North America, which decreased by $59.3 million. Compared to the second quarter of fiscal 2015, Surface net sales in the second quarter of fiscal 2016 included a $5.5 million unfavorable effect of foreign currency translation, due primarily to the decline in the value of the Chilean peso relative to the U.S. dollar.

Operating (Loss) Income

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

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	Quarter Ended
	April 29, 2016					May 1, 2015
	Operating					Operating
In thousands	(Loss) Income			% of Net Sales		Income (Loss)			% of Net Sales
Operating (Loss) Income
Underground	$	(20,817	)	(6	)	$	51,476		12
Surface	35,647			13		58,837			14
Corporate Expense	(11,728		)			(8,654		)
Eliminations	(7,427		)			(8,714		)
Total Operating (Loss) Income	$	(4,325	)	(1	)	$	92,945		11

Underground operating loss in the second quarter of fiscal 2016 was $20.8 million, or 6% of net sales, compared to operating income of $51.5 million, or 12% of net sales, in the second quarter of fiscal 2015. The decrease in Underground operating income of $72.3 million, or 140%, in the second quarter of fiscal 2016 was primarily due to lower sales volumes of $34.9 million, higher restructuring charges of $26.0 million, lower net manufacturing cost absorption of $7.9 million and a less favorable product mix of $4.9 million. These items were partially offset by lower product development, selling and administrative expenses of $6.9 million.

Surface operating income in the second quarter of fiscal 2016 was $35.6 million, or 13% of net sales, compared to $58.8 million, or 14% of net sales, in the second quarter of fiscal 2015. The decrease in Surface operating income of $23.2 million, or 39%, in the second quarter of fiscal 2016 was primarily due to lower sales volumes of $49.0 million and lower net manufacturing cost absorption of $8.3 million. These items were partially offset by favorable period costs of $13.8 million, lower product development, selling and administrative expenses of $7.9 million, a more favorable product mix of $7.4 million and lower restructuring charges of $4.8 million.

Corporate expense in the second quarter of fiscal 2016 was $11.7 million, compared to $8.7 million in the second quarter of fiscal 2015. The increase in corporate expense of $3.1 million, or 36%, is primarily due to the release of a portion of the prior year mark to market pension adjustments that was initially capitalized to inventory.

Product Development, Selling and Administrative Expense

Product development, selling and administrative expense in the second quarter of fiscal 2016 was $116.6 million, or 19% of net sales, compared to $131.1 million, or 16% of net sales, in the second quarter of fiscal 2015. The decrease in product development, selling and administrative expense of $14.5 million, or 11%, was primarily due to lower overall incentive based compensation and headcount reductions, as well as other savings from the Company's cost reduction programs. In addition, the Company incurred lower warranty expense on lower sales volumes.

Restructuring Expenses

Restructuring expenses in the second quarter of fiscal 2016 were $33.4 million, compared to $11.1 million in the second quarter of fiscal 2015. The increase in restructuring expenses of $22.3 million was due to the Company's implementation of cost reduction initiatives in response to the adverse market conditions. These costs include entering into severance and termination agreements and full or partial closures or idling of certain facilities in China in order to better align the Company's overall cost structure with anticipated levels of future demand.

The restructuring expenses include impairment charges for both property, plant and equipment and indefinite-lived trademarks. As of April 29, 2016, we assessed our long-lived assets of an asset group in China for impairment as a result of the Company's decision to idle certain facilities in China due to the continued market challenges in that region. As such, it was determined that the cash flows associated with this asset group would be insufficient to support their carrying value. A valuation was performed over property, plant and equipment using the market approach for real property. Personal property was valued primarily using the cost approach. As a result of this analysis, non-cash impairment charges of $10.6 million were recorded in the second quarter in our Underground segment related to such property, plant, and equipment.

As mentioned above, we also assessed our indefinite-lived trademarks as of April 29, 2016 as a result of the Company's decision to idle certain facilities in China due to the continued market challenges in that region. A valuation was performed over trademarks using the relief-from-royalty methodology, and a non-cash impairment charge of $6.6 million was recorded in the second quarter of fiscal 2016 in our Underground segment.

Net Interest Expense

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Net interest expense in the second quarter of fiscal 2016 was $11.6 million, compared to $13.3 million in the second quarter of fiscal 2015. The decrease in net interest expense of $1.7 million, or 13%, was primarily due to our redemption in the fourth quarter of fiscal 2015 of the $250 million aggregate principal amount of our 6% Senior Notes due 2016 (the "2016 Senior Notes"). The reduction was partially offset by an increase in interest expense on our term loan and revolving credit facility due to our lower credit rating. The impact of the redemption of the 2016 Senior Notes and interest rate increase was also partially offset by a decrease in interest bearing assets as a result of the fourth quarter fiscal 2015 customer payment of a long-term receivable.

Provision for Income Taxes

In accordance with FASB Accounting Standards Codification 740, Income Taxes, each interim period is considered integral to the annual period and tax expense is measured using an estimated annual effective tax rate. An entity is required to record income tax expense each quarter based on its best estimate of the annual effective tax rate for the full fiscal year and use that rate to provide for income taxes on a current year-to-date basis, as adjusted for discrete taxable events that occur during the interim period. If, however, the entity is unable to reliably estimate its annual effective tax rate due to the Company’s inability to forecast income by jurisdiction or as a result of rate volatility caused by minor changes in income when projecting near break-even earnings, then the actual effective tax rate for the year-to-date may be the best annual effective tax rate estimate. For the quarter ended April 29, 2016, the Company determined that the estimated annual effective rate method would not provide for a reliable estimate due to the volatility of income tax (benefit) expense to modest changes in forecasted annual pre-tax results. Therefore, the Company recorded a tax benefit for the quarter ended April 29, 2016 based on the actual effective rate (i.e. the “cut-off” method). The effective tax rate for the quarter ended May 1, 2015 was calculated based on an estimated annual effective tax rate in addition to discrete items.

The benefit for income taxes in the second quarter of fiscal 2016 was $0.6 million, compared to a provision of $23.7 million in the second quarter of fiscal 2015. The effective income tax rate was 3.8% in the second quarter of fiscal 2016, compared to 29.8% in the second quarter of fiscal 2015. A net discrete tax benefit of $6.1 million was recorded in the second quarter of fiscal 2016, compared to expense of $1.2 million in the second quarter of fiscal 2015. The fiscal 2016 net discrete tax benefit primarily related to the revision of prior year fourth quarter valuation allowance calculations on our domestic China business' deferred tax assets. The increase in the effective tax rate for the quarter, excluding discrete items, was primarily attributable to a change in geographical mix of projected earnings and and a change in the net operating losses of certain foreign subsidiaries without a currently recognizable tax benefit.

Bookings

Bookings represent new customer orders for original equipment and services. Services bookings include orders for parts, components and rebuilds, but are exclusive of long-term maintenance and repair arrangements and life cycle management arrangements awarded to us during the period. We record bookings when firm orders are received and add the bookings to our backlog. Bookings for the quarters ended April 29, 2016 and May 1, 2015 were as follows:



	Quarter Ended
In thousands	April 29, 2016			May 1, 2015			$ Change			% Change
Bookings
Underground	$	361,869		$	437,482		$	(75,613	)	(17	)
Surface	339,679			344,260			(4,581		)	(1	)
Eliminations	(20,906		)	(36,985		)	16,079
Total Bookings	$	680,642		$	744,757		$	(64,115	)	(9	)

Underground bookings in the second quarter of fiscal 2016 were $361.9 million, compared to $437.5 million in the second quarter of fiscal 2015. The decrease in Underground bookings of $75.6 million, or 17%, in the second quarter of fiscal 2016 reflected a decrease in original equipment bookings of $21.1 million, or 15%, and a decrease in service bookings of $54.5 million, or 18%. Original equipment bookings declined in all regions except Eurasia, which increased due to a longwall system and a room and pillar booking in India in the second quarter of fiscal 2016. The decrease in original equipment bookings was led by North America and China, which declined by $28.7 million and $26.5 million, respectively. Service bookings decreased in all regions except Eurasia and Africa. The decline in service bookings was led by North America, which decreased by $74.7 million. Compared to the second quarter of fiscal 2015, Underground bookings in the second quarter of fiscal 2016 included a $6.8 million unfavorable impact of foreign currency translation, due primarily to the decline in the value of the South African rand relative to the U.S. dollar.

Surface bookings in the second quarter of fiscal 2016 were $339.7 million, compared to $344.3 million in the second quarter of fiscal 2015. The decrease in Surface bookings of $4.6 million, or 1%, in the second quarter of fiscal 2016 reflected an increase in original equipment bookings of $28.4 million, or 102%, and a decrease in service bookings of $33.0 million, or 10%. Original

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equipment bookings declined in all regions except China, which was flat, and North America, which increased by $64.1 million due primarily to a multiple electric shovel booking in the second quarter of fiscal 2016. Service bookings decreased in all regions except Eurasia and Africa. The decline in service bookings was led by North America, which decreased by $30.7 million. Compared to the second quarter of fiscal 2015, Surface bookings in the second quarter of fiscal 2016 included a $1.7 million unfavorable impact of foreign currency translation.

Six Months Ended April 29, 2016 Compared With Six Months Ended May 1, 2015

Net Sales

The following table sets forth the net sales included in our Condensed Consolidated Statements of Operations:



	Six Months Ended
In thousands	April 29, 2016			May 1, 2015			$ Change			% Change
Net Sales
Underground	$	617,097		$	808,602		$	(191,505	)	(24	)
Surface	561,676			770,422			(208,746		)	(27	)
Eliminations	(50,488		)	(64,628		)	14,140
Total Sales	$	1,128,285		$	1,514,396		$	(386,111	)	(25	)

Underground net sales in the first six months of fiscal 2016 were $617.1 million, compared to $808.6 million in the first six months of fiscal 2015. The decrease in Underground net sales of $191.5 million, or 24%, in the first six months of fiscal 2016 reflected a decrease in original equipment sales of $55.3 million, or 24%, and a decrease in service sales of $136.3 million, or 23%. Original equipment sales declined in all regions except Eurasia and Australia. The decrease in original equipment sales was led by China, which declined by $35.4 million. Service sales also decreased in all regions except Eurasia and Australia. The decline in service sales was led by North America, which decreased by $132.0 million. Compared to the first six months of fiscal 2015, Underground net sales in the first six months of fiscal 2016 included a $39.1 million unfavorable effect of foreign currency translation, due primarily to the decline in the value of the South African rand relative to the U.S. dollar.

Surface net sales in the first six months of fiscal 2016 were $561.7 million, compared to $770.4 million in the first six months of fiscal 2015. The decrease in Surface net sales of $208.7 million, or 27%, in the first six months of fiscal 2016 reflected a decrease in original equipment sales of $104.2 million, or 51%, and a decrease in service sales of $104.5 million, or 18%. Original equipment sales declined in all regions except North America. The decrease in original equipment sales was led by Latin America, which declined by $87.8 million. Service sales decreased in all regions except Eurasia. The decline in service sales was led by North America, which decreased by $91.2 million. Compared to the first six months of fiscal 2015, Surface net sales in the first six months of fiscal 2016 included a $16.2 million unfavorable effect of foreign currency translation, due primarily to the decline in the value of the Chilean peso and the Australian dollar relative to the U.S. dollar.

Operating (Loss) Income

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



	Six Months Ended
	April 29, 2016					May 1, 2015
	Operating					Operating
In thousands	(Loss) Income			% of Net Sales		Income (Loss)			% of Net Sales
Operating (Loss) Income
Underground	$	(59,267	)	(10	)	$	93,727		12
Surface	43,435			8		90,182			12
Corporate Expense	(19,257		)			(17,336		)
Eliminations	(14,323		)			(15,170		)
Total Operating (Loss) Income	$	(49,412	)	(4	)	$	151,403		10

Underground operating loss in the first six months of fiscal 2016 was $59.3 million, or 10% of net sales, compared to operating income of $93.7 million, or 12% of net sales, in the first six months of fiscal 2015. The decrease in Underground operating income of $153.0 million, or 163%, in the first six months of fiscal 2016 was primarily due to lower sales volumes of $75.1 million, higher restructuring charges of $51.3 million, a less favorable product mix of $20.7 million and lower net manufacturing cost

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absorption of $17.8 million. These items were partially offset by lower product development, selling and administrative expenses of $14.7 million.

Surface operating income in the first six months of fiscal 2016 was $43.4 million, or 8% of net sales, compared to $90.2 million, or 12% of net sales, in the first six months of fiscal 2015. The decrease in Surface operating income of $46.7 million, or 52%, in the first six months of fiscal 2016 was primarily due to lower sales volumes of $76.0 million and lower net manufacturing cost absorption of $12.5 million. These items were partially offset by favorable period costs of $19.6 million, lower product development, selling, and administrative expenses of $15.2 million and lower restructuring charges of $4.5 million.

Corporate expense in the first six months of fiscal 2016 was $19.3 million, compared to $17.3 million in the first six months of fiscal 2015. The increase in corporate expense of $1.9 million, or 11%, is primarily due to the $6.4 million release of a portion of the fiscal 2015 mark to market pension adjustments that was initially capitalized to inventory, partially offset by $4.8 million of lower-incentive based compensation on our share-based compensation plans.

Product Development, Selling and Administrative Expense

Product development, selling and administrative expense in the first six months of fiscal 2016 was $227.1 million, or 20% of net sales, compared to $261.5 million, or 17.3% of net sales, in the first six months of fiscal 2015. The decrease in product development, selling and administrative expense of $34.5 million, or 13%, was primarily due to lower overall incentive based compensation and headcount reductions, as well as other savings from the Company's cost reduction programs. In addition, the Company incurred lower warranty expense and commissions on lower sales volumes, as well as reduced bad debt and litigation charges during the current year.

Restructuring Expenses

Restructuring expenses in the first six months of fiscal 2016 were $60.1 million, compared to $11.8 million in the first six months of fiscal 2015. The increase in restructuring expenses of $48.3 million was due to the Company's implementation of cost reduction initiatives in response to the adverse market conditions. These costs include entering into severance and termination agreements and accelerated depreciation and asset impairment charges due to full or partial closures of certain facilities in China in order to better align the Company's overall cost structure with anticipated levels of future demand.

The restructuring expenses include impairment charges for both property, plant and equipment and indefinite-lived trademarks. As of April 29, 2016, we assessed our long-lived assets of an asset group in China for impairment as a result of the Company's decision to idle certain facilities in China due to the continued market challenges in that region. As such, it was determined that the cash flows associated with this asset group would be insufficient to support their carrying value. A valuation was performed over property, plant and equipment using the market approach for real property. Personal property was valued primarily using the cost approach. As a result of this analysis, non-cash impairment charges of $10.6 million were recorded in the six months ended April 29, 2016 in our Underground segment related to such property, plant, and equipment.

As mentioned above, we also assessed our indefinite-lived trademarks as of April 29, 2016 as a result of the Company's decision to idle certain facilities in China due to the continued market challenges in that region. A valuation was performed over trademarks using the relief-from-royalty methodology, and a non-cash impairment charge of $6.6 million was recorded in the six months ended April 29, 2016 in our Underground segment.

Net Interest Expense

Net interest expense in the first six months of fiscal 2016 was $23.7 million, compared to $26.2 million in the first six months of fiscal 2015. The decrease in net interest expense of $2.5 million, or 10%, was primarily due to the fourth quarter fiscal 2015 redemption of the $250 million aggregate principal amount of our 6% Senior Notes due 2016 (the "2016 Senior Notes"). The cost of redemption, including the payment of the make whole premium, was funded with a combination of cash on hand and borrowings under the Company's Credit Agreement, which were drawn at a lower interest rate than the rate on the 2016 Senior Notes and were repaid in the first quarter of fiscal 2016. The reduction was partially offset by an increase in interest expense on the term loan and revolving credit facility due to our lower credit rating. The impact of the redemption of the 2016 Senior Notes and interest rate increase was partially offset by a decrease in interest bearing assets as a result of the fourth quarter fiscal 2015 customer payment of a long-term receivable.

Provision for Income Taxes

As noted above, for the six months ended April 29, 2016, the Company determined that the estimated annual effective rate method would not provide a reliable estimate due to the volatility of income tax expense (benefit) to modest changes in forecasted annual pre-tax results. Therefore, the Company recorded a tax benefit for the six months ended April 29, 2016 based on the actual

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effective rate (i.e. the “cut-off” method). The effective tax rate for the six months ended May 1, 2015 was calculated based on an estimated annual effective tax rate in addition to discrete items.

The benefit for income taxes in the first six months of fiscal 2016 was $17.6 million, compared to a provision of $38.7 million in the first six months of fiscal 2015. The effective income tax rate was 24.0% in the first six months of fiscal 2016, compared to 30.9% in the first six months of fiscal 2015. A net discrete tax benefit of $7.0 million was recorded in the first six months of fiscal 2016, compared to expense of $1.6 million in the first six months of fiscal 2015. The fiscal 2016 net discrete tax benefit primarily related to the revision of prior year fourth quarter valuation allowance calculations on our domestic China business' deferred tax assets. The decrease in the effective tax rate for the quarter, excluding discrete items, was primarily attributable to a change in geographical mix of projected earnings and a change in the net operating losses of certain foreign subsidiaries without a currently recognizable tax benefit.

Bookings and Backlog

Bookings for the six months ended April 29, 2016 and May 1, 2015 were as follows:



	Six Months Ended
In thousands	April 29, 2016			May 1, 2015			$ Change			% Change
Bookings
Underground	$	642,748		$	844,391		$	(201,643	)	(24	)
Surface	625,632			655,058			(29,426		)	(4	)
Eliminations	(37,924		)	(54,543		)	16,619
Total Bookings	$	1,230,456		$	1,444,906		$	(214,450	)	(15	)

Underground bookings in the first six months of fiscal 2016 were $642.7 million, compared to $844.4 million in the first six months of fiscal 2015. The decrease in Underground bookings of $201.6 million, or 24%, in the first six months of fiscal 2016 reflected a decrease in original equipment bookings of $68.4 million, or 27%, and a decrease in service bookings of $133.2 million, or 23%. Original equipment bookings declined in all regions except Eurasia, which increased due to a longwall system and a room and pillar booking in India in the second quarter of fiscal 2016. The decrease in original equipment bookings was led by North America, which declined by $87.0 million. Service bookings also decreased in all regions except Eurasia. Similarly, the decline in service bookings was also led by North America, which decreased by $144.1 million. Compared to the first six months of fiscal 2015, Underground bookings in the first six months of fiscal 2016 included a $45.9 million unfavorable impact of foreign currency translation, due primarily to the decline in the value of the South African rand relative to the U.S. dollar.

Surface bookings in the first six months of fiscal 2016 were $625.6 million, compared to $655.1 million in the first six months of fiscal 2015. The decrease in Surface bookings of $29.4 million, or 4%, in the first six months of fiscal 2016 reflected an increase in original equipment bookings of $17.7 million, or 21%, and a decrease in service bookings of $47.1 million, or 8%. Original equipment bookings increased in all regions except Latin America and Eurasia. The increase in original equipment bookings was led by North America, which improved by $54.3 million due primarily to a multiple electric shovel booking in the second quarter of fiscal 2016. Service bookings decreased in all regions except Eurasia. The decline in service bookings was also led by North America, which decreased by $51.5 million. Compared to the first six months of fiscal 2015, Surface bookings in the first six months of fiscal 2016 included a $12.3 million unfavorable impact of foreign currency translation, due primarily to the decline in the value of the Australian dollar relative to the U.S. dollar.

Backlog represents unfilled customer orders for our original equipment and service, exclusive of long-term maintenance and repair arrangements and life cycle management arrangements. Customer orders included in backlog represent arrangements to purchase specific original equipment or services. The backlog amounts reported exclude sales already recognized by period end under the percentage-of-completion method of accounting. The following table provides backlog as of April 29, 2016 and October 30, 2015:



In thousands	April 29, 2016			October 30, 2015
Backlog
Underground	$	567,528		$	541,877
Surface	457,966			394,010
Eliminations	(49,844		)	(62,407		)
Total Backlog	$	975,650		$	873,480

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Liquidity and Capital Resources

The following table summarizes the major elements of our working capital as of April 29, 2016 and October 30, 2015:



In thousands	April 29, 2016			October 30, 2015
Accounts receivable, net	$	670,376		$	812,073
Inventories	939,863			1,007,925
Trade accounts payable	(240,900		)	(275,789		)
Advance payments and progress billings	(225,167		)	(229,470		)
Trade Working Capital	$	1,144,172		$	1,314,739
Other current assets	123,033			145,559
Short-term borrowings, including current portion of long-term obligations	(23,353		)	(26,321		)
Employee compensation and benefits	(83,723		)	(90,335		)
Accrued warranties	(46,981		)	(52,146		)
Other accrued liabilities	(206,804		)	(225,277		)
Working Capital Excluding Cash and Cash Equivalents	$	906,344		$	1,066,219
Cash and cash equivalents	160,878			102,885
Working Capital	$	1,067,222		$	1,169,104

We currently use trade working capital and cash flows from continuing operations as two financial measurements to evaluate the performance of our operations and our ability to meet our financial obligations. We require trade working capital investment because our direct service model requires us to maintain certain inventory levels in order to maximize our customers’ machine availability. This information also provides management with a focus on our receivable terms and collectability efforts and our ability to obtain advance payments on original equipment orders. As part of operational excellence initiatives in our purchasing and manufacturing processes, we continue to align inventory levels with customer demand and current production schedules.

Cash provided by operating activities during the first six months of fiscal 2016 was $152.8 million, compared to $52.8 million provided during the first six months of fiscal 2015. The increase in cash from continuing operations was primarily due to decreased inventory and accounts receivable levels matching customer demand for original equipment and service, as well as reduced employee compensation and benefits as a result of decreased incentive-based compensation payments. These items were partially offset by lower earnings.

Cash used by investing activities during the first six months of fiscal 2016 was $10.5 million, compared to $35.5 million used during the first six months of fiscal 2015. The decrease in cash used by investing activities was primarily due to lower capital expenditures of $18.7 million in the first six months of fiscal 2016 as compared to the first six months of fiscal 2015, as well as increased proceeds of $6.6 million primarily on the sale of non-core assets in our Underground segment.

Cash used by financing activities during the first six months of fiscal 2016 was $83.5 million, compared to $85.5 million during the first six months of fiscal 2015. The decrease in cash used by financing activities was primarily due to the fact that we made no share repurchases in the current year and paid out lower dividends. These items were partially offset by our increased required repayments and prepayments on the Term Loan and our first quarter payoff of amounts previously outstanding under our Credit Agreement resulting from the redemption of our 2016 Senior Notes in the fourth quarter of fiscal 2015.

On March 3, 2016, our Board of Directors declared a cash dividend of $0.01 per outstanding share of common stock. The dividend was paid on April 4, 2016 to all shareholders of record at the close of business on March 18, 2016. In addition, on June 2, 2016, our Board of Directors declared a cash dividend of $0.01 per outstanding share of common stock. The dividend will be paid on July 6, 2016 to all shareholders of record at the close of business on June 22, 2016.

Restructuring Programs

Restructuring activities continued in the first six months of fiscal 2016 to better align the Company's workforce and overall cost structure with current and expected future demand. For the 2016 fiscal year, total restructuring charges are anticipated to be $90 million to $100 million, with expected cash costs of approximately $40 million to $50 million. These ranges include expected costs for activities not yet implemented.

Retiree Benefits

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We sponsor pension plans in the U.S. and in other countries. The significance of the funding requirements of these plans is largely dependent on the value of the plan assets, the investment returns on the plan assets, actuarial assumptions, including discount rates, and the impact of the Pension Protection Act of 2006. For the six months ended April 29, 2016, we contributed $9.4 million to our defined benefit employee pension and postretirement plans. We expect contributions to our defined benefit pension and postretirement plans to be approximately $15.0 million for the 2016 fiscal year.

Credit Agreement and Senior Notes

We entered into our Credit Agreement on July 29, 2014. On December 14, 2015, we entered into an amendment to our Credit Agreement that increased the permitted ratio from 3.0x to 3.5x for the second quarter of fiscal 2016 and will further increase the permitted ratio to 4.25x in the third quarter of fiscal 2016 and to 4.5x in the fourth quarter of fiscal 2016. The ratio will begin to decline on a quarterly basis beginning in the third quarter of fiscal 2017 and return to 3.0x in the second quarter of fiscal 2018. The amendment also reduced the aggregate amount of revolving commitments of the lenders from $1.0 billion to $850.0 million and added a letter of credit sublimit of $500.0 million. In addition, we also agreed to limit priority debt (secured indebtedness and the unsecured indebtedness of our foreign subsidiaries) to 10% of consolidated net worth and to limit cash dividends to $25.0 million per year in the aggregate. We may continue to request an increase of up to $250.0 million of additional aggregate revolving commitments, subject to the terms and conditions contained in the Credit Agreement. Under the terms of the Credit Agreement, we pay a commitment fee ranging from 0.09% to 0.30% on the unused portion of the revolving credit facility based on our credit rating. Letters of credit issued under applicable provisions of the Credit Agreement represent an unfunded utilization of the Credit Agreement for purposes of calculating the periodic commitment fee due. Eurodollar rate loans bear interest for a period from the applicable borrowing date until a date one week or one, two, three or six months thereafter, as selected by the Company, at the corresponding Eurodollar rate plus a margin of 1.0% to 2.0% depending on the Company's credit rating. Base rate loans bear interest from the applicable borrowing date at a rate equal to (i) the highest of (a) the federal funds rate plus 0.5%, (b) the rate of interest in effect for such day as publicly announced by the administrative agent as its "prime rate," or (c) a daily rate equal to the one-month Eurodollar rate plus 1.0%, plus (ii) a margin that varies according to the Company's credit rating. Swing line loans bear interest at either the base rate described above or the daily floating Eurodollar rate plus the applicable margin, as selected by the Company. The Credit Agreement 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 Credit Agreement also restricts payment of dividends or other returns of capital to shareholders if the consolidated leverage ratio exceeds the maximum amount set forth therein. As of April 29, 2016, we were in compliance with all financial covenants of the Credit Agreement.

As of April 29, 2016, there were no direct borrowings under the Credit Agreement. Total interest expense recognized for direct borrowings under the Credit Agreement for the quarters ended April 29, 2016 and May 1, 2015 was $0.1 million and $0.2 million, respectively. Outstanding standby letters of credit issued under the Credit Agreement, which count toward the $850.0 million credit limit, totaled $112.1 million. As of April 29, 2016, there was $737.9 million available for borrowings under the Credit Agreement.

On July 29, 2014, we also entered into a term loan agreement that matures July 29, 2019 and provides for a commitment of up to $375.0 million. The Term Loan replaced our prior term loan, dated as of June 16, 2011. The Prior Term Loan had been scheduled to mature on July 16, 2016 and provided an initial commitment of $500.0 million, which had been drawn in full in conjunction with our fiscal 2011 acquisition of LeTourneau Technologies, Inc. and had been amortized to $375.0 million at the date that we entered into the Term Loan. We utilized the $375.0 million commitment under the Term Loan to repay the balance outstanding under the Prior Term Loan. On December 14, 2015, the Term Loan was amended to be consistent with the revolving Credit Agreement with respect to the maximum leverage ratio, restrictions on priority debt and dividends, and other restricted payments. The Term Loan requires quarterly principal payments beginning in fiscal 2016, of which $4.7 million and $9.4 million were paid during the quarter and six months ended April 29, 2016, respectively. Additionally, in the second quarter we prepaid $9.4 million of the payments due in the third and fourth quarter of fiscal 2016. The Term Loan contains terms and conditions that are the same as 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. As of April 29, 2016, 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 5.125% Senior Notes due in 2021 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, 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

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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%.

Stock Repurchase Program

In August 2013, our Board of Directors authorized the repurchase of up to $1.0 billion in shares of our common stock until August 2016. Under the program, we may repurchase shares in the open market in accordance with applicable SEC rules and regulations; however, we do not currently plan to purchase additional shares in the near future. During the quarter and six months ended April 29, 2016, we did not repurchase any shares of common stock. During the quarter ended May 1, 2015, we did not repurchase any shares of common stock. During the six months ended May 1, 2015, we repurchased 954,580 shares of common stock for approximately $50.0 million. Shares purchased during the first quarter of fiscal 2015 represent the latest purchases to date under the program. Since the program's inception, we have repurchased 9,771,605 shares of common stock under the program for approximately $533.4 million, leaving $466.6 million available under the program.

Advance Payments and Progress Billings

As part of the negotiation process associated with original equipment orders and service contracts, contracts generally require advance payments and progress billings from our customers to support the procurement of inventory and other resources. As of April 29, 2016, advance payments and progress billings were $225.2 million. As orders are shipped or costs are incurred, the advance payments and progress billings are recognized as revenue in the consolidated financial statements.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. Goodwill is assigned to specific reporting units, and is tested for impairment at least annually during the fourth quarter of our fiscal year or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. The most recent goodwill impairment test was performed as of January 29, 2016, as our total shareholders’ equity exceeded our market capitalization based on our stock price of $9.97 per share at that point in time, and therefore indicated the possibility of an impairment to goodwill. This interim impairment test focused on our Surface reporting unit, as all Underground goodwill was fully impaired in the fourth quarter of fiscal 2015. After completing our step one analysis, we concluded that the estimated fair value of our Surface reporting unit exceeded its carrying value by 15%. We determined that there are no indicators of impairment for the quarter ended April 29, 2016 that would warrant an additional interim impairment test at that point in time. Although we have concluded that there is no impairment on the goodwill of $350.9 million associated with our Surface reporting unit as of April 29, 2016, we will continue to closely monitor this in the future considering the volatility and uncertainty in the global commodity markets that our surface mining equipment services. Should there be further market

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declines, specifically related to Latin American copper and North American coal and iron ore, which are the most significant markets serviced by our Surface reporting unit, or if our market capitalization falls below our total shareholders' equity in future periods, there would be an increased risk that we would be required to recognize impairment to the Surface reporting unit's goodwill.

Financial Condition

Based upon our available cash and our available borrowings under our credit facility, we believe our liquidity and capital resources are adequate to meet our projected needs for the next 12 months. In this regard, we had $160.9 million in cash and cash equivalents as of April 29, 2016 and $737.9 million available for borrowings under the Credit Agreement. Further, we continue to effectively manage our cash flow from operations, which includes continuing to drive working capital improvements, continuing to track the results of our cost savings measures, and continuing to institute additional measures as needed.

During the first six months of fiscal 2016, the Company amended its Credit Agreement which, among other aspects, reduced the aggregate amount of revolving commitments of the lenders from $1.0 billion to $850.0 million and increased the consolidated leverage ratio from a permitted limit of 3.0x to 3.5x for the second quarter of fiscal 2016 and will further increase the permitted ratio to 4.25x in the third quarter of fiscal 2016 and to 4.5x in the fourth quarter of fiscal 2016. The ratio will begin to decline on a quarterly basis beginning in the third quarter of fiscal 2017 and return to 3.0x in the second quarter of fiscal 2018. Even considering the commitment reduction, we expect to meet our U.S. funding needs without repatriating undistributed offshore profits that are indefinitely reinvested outside the U.S., which would result in the incurrence of additional U.S. corporate income taxes on such repatriated undistributed profits. In addition, during the first six months of fiscal 2016 we reduced dividends from $0.20 per share to $0.01 per share. If maintained at current levels, this action will reduce annual cash outlays by approximately $75.0 million from fiscal 2015 levels. Further, as discussed in the Credit Agreement and Notes section above, our current credit agreement constrains the extent to which we may increase our dividend rate in future quarters until the expiration of the Covenant Relief Period in our fiscal second quarter of 2018.

We expect our requirements for working capital, dividends, pension contributions, capital expenditures, principal and interest payments on our Term Loan and Senior Notes and acquisitions will still be adequately funded by cash on hand and continuing operations, and supplemented by short and long term borrowings, as required.

However, as discussed in the Credit Agreement and Senior Notes section above, our existing credit agreement contains certain financial tests and other covenants that limit our ability to incur additional indebtedness. Our ability to comply with financial tests may be adversely affected by changes in economic or business conditions beyond our control, especially in the current volatile market environment. Borrowing limitations can have material adverse effects on our liquidity and we will continue to monitor the impact of any changes in business and economic conditions on our ability to obtain financing.

Off-Balance Sheet Arrangements

We lease various assets under operating leases. No significant changes to lease commitments have occurred since our year ended October 30, 2015. We have no other off-balance sheet arrangements.

Critical Accounting Estimates, Assumptions and Policies

Our discussion and analysis of financial condition and results of operations is based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these Condensed Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We continually evaluate our estimates and judgments, including those related to revenue recognition, bad debts, inventory, goodwill and intangible assets, warranty, pension and postretirement benefits and costs, income taxes and contingencies. We base our estimates on historical experience and assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

We believe our accounting policies for revenue recognition, inventories, goodwill and other intangible assets, accrued warranties, pension and postretirement benefits and costs and income taxes are the policies that most frequently require us to make estimates and judgments, and therefore are critical to the understanding of our results of operations. Please refer to Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended October 30, 2015 for a discussion of these policies.

Other than the impact of the adoption of ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, as discussed in Note 20, Recent Accounting Pronouncements, in this Form 10-Q, there were no material changes to these policies since our year ended October 30, 2015.

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New Accounting Pronouncements

Our new accounting pronouncements are set forth under Part I, Item 1 of this Quarterly Report on Form 10-Q and are incorporated herein by reference.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As more fully described in our Annual Report on Form 10-K for the year ended October 30, 2015, we are exposed to various types of market risks, such as interest rate risk, commodity price risk and foreign currency risk. We monitor our risks on a continuous basis and generally enter into forward foreign currency contracts to minimize our foreign currency exposures. We do not engage in speculation in our derivative strategies. Gains and losses from foreign currency contract activities are offset by changes in the underlying costs of the transactions being hedged. There have been no material changes to our primary market risk exposures or how such risks are managed since our year ended October 30, 2015.

Item 4. Controls and Procedures

We have established disclosure controls and procedures to ensure that material information relating to us, including our consolidated subsidiaries, is made known on a timely basis to the officers who certify our financial reports and to other members of senior management and the Board of Directors.

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

There have not been any changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during our quarter ended April 29, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

SEC Investigation. In the fourth quarter of 2014, we received a notice from the SEC’s Division of Enforcement that it was conducting an investigation into certain matters involving our acquisition of IMM in 2012 and related accounting matters. The notice was accompanied by a subpoena directing us to produce a variety of documents. We have provided documents responsive to the subpoena and are cooperating with the SEC in its investigation. While it is not possible to predict the timing or outcome of the SEC inquiry, we currently believe that this matter will not have a material adverse effect on our consolidated results of operation, financial position, or liquidity.

Item 1A. Risk Factors

During the quarter ended April 29, 2016, there were no material changes from the risk factors disclosed in Item 1A of our Annual Report on Form 10-K for our fiscal year ended October 30, 2015.

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

Not applicable.

Item 3. Defaults upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

The Company previously disclosed that in 2015 it commenced cost reduction initiatives in order to better align the Company’s overall cost structure with anticipated levels of future demand. Costs related to these initiatives include entering into severance and termination agreements and full or partial closures of certain facilities. On June 2, 2016, the Company announced that additional restructuring charges in the range of $30.0 million to $40.0 million are expected in the remainder of fiscal 2016 as the Company continues to reduce staffing levels and optimize its global manufacturing and service footprint. We incurred approximately $60.1 million of charges under these programs in the first six months of fiscal 2016, which consisted primarily of employee severance and termination costs, accelerated depreciation and asset impairment charges. See Note 12, Restructuring Charges, for additional information related to our restructuring programs.

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Item 6. Exhibits




10.1	Form of Restricted Stock Unit Award Agreement, dated March 8, 2016, between the registrant and each of its non-employee directors in connection with restricted stock unit awards granted under the Joy Global Inc. 2016 Omnibus Incentive Compensation Plan.

31.1	Chief Executive Officer Rule 13a-14(a)/15d-14(a) Certifications

31.2	Chief Financial Officer Rule 13a-14(a)/15d-14(a) Certifications

32.1	Section 1350 Certifications

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema Document

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	XBRL Taxonomy Extension Definition Document

101.LAB	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Milwaukee, Wisconsin, on June 3, 2016.



	JOY GLOBAL INC.
	(Registrant)

Date: June 3, 2016	/s/ James M. Sullivan
	James M. Sullivan
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

Date: June 3, 2016	/s/ Matthew S. Kulasa
	Matthew S. Kulasa
	Vice President, Controller and Chief Accounting Officer
	(Principal Accounting Officer)

EXHIBIT 10.1

RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS AGREEMENT is entered into as of March 8, 2016, between Joy Global Inc. (the “Company”) and (the “Grantee”). In consideration of the mutual promises and covenants made in this Agreement and the mutual benefits to be derived from this Agreement, the Company and the Grantee agree as follows:

Subject to the provisions of this Agreement and the provisions of the Joy Global Inc. 2016 Omnibus Incentive Compensation Plan (as amended from time to time, the “Plan”), the Company hereby grants to the Grantee 5,454 restricted stock units (the “Restricted Stock Units”) as of March 8, 2016 (the “Grant Date”). This grant constitutes an “other stock-based award” under Section 9 of the Plan. Capitalized terms not defined in this Agreement have the meanings given to them in the Plan.

1. Vesting. Subject to the provisions of Paragraph 5(a) of this Agreement, the Restricted Stock Units will vest and become non-forfeitable on the one-year anniversary of the Grant Date.

2. Restriction Period. The Restriction Period is the time between the Grant Date and the date on which the Restricted Stock Units are settled.

3. No Shareholder Rights Before Settlement. The Grantee shall not be entitled to any rights or privileges of ownership of shares of Common Stock with respect to any Restricted Stock Unit unless and until a share of Common Stock is actually delivered to the Grantee in settlement of such Restricted Stock Unit pursuant to this Agreement.

4. Dividends. On each payment date with respect to any dividend or distribution to holders of Common Stock with a record date occurring during a Restriction Period, the Grantee will be credited with additional Restricted Stock Units (rounded to the nearest whole unit) having a value equal to the amount of the dividend or distribution that would have been payable with respect to the Restricted Stock Units if they had been actual shares of Common Stock on such record date, based on the Fair Market Value of a share of Common Stock on the applicable payment date. Such additional Restricted Stock Units shall also be credited with additional Restricted Stock Units as further dividends or distributions are declared. All such additional Restricted Stock Units shall be subject to the same restrictions and conditions as the Restricted Stock Units with respect to which they were credited, including the forfeiture and settlement terms in Paragraph 5 of this Agreement and any deferral election.

5. Forfeiture and Settlement of Units.

(a)The Restricted Stock Units shall be forfeited if the Grantee’s service as a member of the Company’s Board of Directors is terminated for any reason prior to the one-year anniversary of the Grant Date; provided, however, that if the Grantee’s service on the Board terminates by reason of the Grantee’s death or Disability (provided that, on account of the Disability, the Grantee is disabled within the meaning of Section 409A(a)

(2)(C) of the Code and the regulations thereunder) (a “409A Disability”), the Restricted Stock Units shall become non-forfeitable. In the Event of Grantee’s death or 409A Disability, the Restricted Stock Units shall be settled as soon as practicable (but no more than 30 days) after the date of death or the 409A Disability. In the event that the Grantee dies before settlement of all of the Grantee’s vested Restricted Stock Units (whether while the Grantee is a member of the Board or after such membership has terminated), all such remaining vested Restricted Stock Units shall be settled by delivery to the Grantee’s beneficiary or beneficiaries (as determined under the Plan), as soon as practicable (but no more than 30 days) after the date of such death, of a number of shares of Common Stock equal to the number of such Restricted Stock Units. If, in the event of the Grantee’s death, the Grantee fails to designate a beneficiary, or if the designated beneficiary of the Grantee dies before the Grantee or before the complete distribution of the amounts distributable under this Agreement, the amounts to be distributed under this Agreement shall be distributed to the legal representative or representatives of the estate of the last to die of the Grantee and the beneficiary.

(b)Unless earlier forfeited or settled pursuant to Paragraph 5(a) of this Agreement, Restricted Stock Units shall be settled as follows:

Restricted Stock Units shall be settled on the one-year anniversary of the Grant Date, except as provided in an executed Deferral Election Form which was received by the Company prior to the Grant Date, a copy of which is attached hereto as Exhibit A (“Deferral-Eligible RSUs”);

Restricted Stock Units shall be settled on the one-year anniversary of the date on which the Grantee’s service on the Board terminates.

(c)Each Restricted Stock Unit settled pursuant to this Paragraph 5 shall be settled by delivery of one share of Common Stock. Any fractional Restricted Stock Units shall be rounded to the nearest whole number.


6.	Change in Control and Corporate Events.

(a) Notwithstanding any other provision of this Agreement, in the event of a Change in Control (unless such Change in Control does not qualify as an event described in Section 409A(a)(2)(A)(v) of the Code and the regulations thereunder), all outstanding Restricted Stock Units held by the Grantee on the effective date of the Change in Control, whether or not then vested, shall be settled as soon as practicable (but no more than 30 days) after the Change in Control by payment to the Grantee of an amount in cash equal to the Fair Market Value of a share of Common Stock on the date of the Change in Control times the number of such Restricted Stock Units.

(b) In the event of any change in corporate capitalization, such as a stock split, reverse stock split, or a corporate transaction, any merger, consolidation, separation, including a spin-off, or other distribution of stock or property of the Company, extraordinary cash dividend, any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code) or any partial or complete liquidation of the Company, the number of Restricted Stock Units subject to the award shall be equitably adjusted by the Committee or Board in its sole discretion; provided, however, that the number of shares of Restricted Stock Units subject to the award shall always be rounded down to a whole number. The determination of the Board or Committee regarding any adjustment will be final and conclusive.

7. Nontransferability. Restricted Stock Units granted under this Agreement are not transferable by the Grantee, whether voluntarily or involuntarily, by operation of law or otherwise, during the Restriction Period, except by will or by laws of descent and distribution. Any assignment, pledge, transfer or other disposition, voluntary or involuntary, of the Restricted Stock Units made, or any attachment, execution, garnishment, or lien issued against or placed upon the Restricted Stock Units, shall be void.

8. Administration. This Agreement and the rights of the Grantee hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Grantee.

9. Notices. All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by facsimile, overnight courier, or registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Grantee:

If to the Company: Joy Global Inc.

100 East Wisconsin Avenue, Suite 2780

Milwaukee, WI 53202

Attention: Corporate Secretary

Facsimile: 414-319-8510

or to such other address or facsimile number as any party shall have furnished to the other in writing in accordance with this Paragraph 9. Notice and communications shall be effective when actually received by the addressee.

10. Successors. Except as otherwise provided hereunder, this Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the Company, and to any transferee or successor of the Grantee pursuant to Paragraph 7.

11. Laws Applicable to Construction. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware as applied to contracts executed in and performed wholly within the State of Delaware, without reference to principles of conflict of laws.

12. Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

13. Conflicts and Interpretation. In the event of any conflict between this Agreement and the Plan, the Plan shall control. In the event of any ambiguity in this Agreement, any term which is not defined in this Agreement, or any matters as to which this Agreement is silent, the Plan shall govern including, without limitation, the provisions thereof pursuant to which the Committee has the power, among others, to (a) interpret the Plan, (b) prescribe, amend and rescind rules and regulations relating to the Plan, and (c) make all other determinations deemed necessary or advisable for the administration of the Plan.

14. Headings. The headings of paragraphs herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any of the provisions of this Agreement.

15. Amendment. This Agreement may not be modified, amended or waived except by an instrument in writing signed by both parties hereto. The waiver by either party of compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this Agreement.

16. Section 409A of the Code. This Agreement (including Exhibit A) and the Plan are intended, and shall be construed, to comply with the requirements of Section 409A of the Code. Any distribution that is triggered by a termination of service on the Board shall be triggered by a separation from service as determined under Section 409A(a)(2)(a)(i) of the Code. However, neither the Agreement nor the Plan transfers to the Company or any entity or other individual any tax or penalty that is the responsibility of the Grantee. If any distribution or settlement of a Restricted Stock Unit pursuant to the terms of this Agreement or the Plan would subject the Grantee to tax under Section 409A of the Code, the Company shall modify this Agreement and/or the Plan (in each case, without the consent of the Grantee) in the least restrictive manner necessary in order to comply with the provisions of Section 409A, other applicable provision(s) of the Code and/or any rules, regulations or other regulatory guidance issued under such statutory provisions and, in each case, without any material diminution in the value of the distributions to the Grantee.

17. Counterparts. This Agreement may be executed in counterparts, which together shall constitute one and the same original.

18. Miscellaneous.

(a) This Agreement shall not confer upon Grantee any right to continue as a member of the Board, nor shall this Agreement interfere in any way with the right of the Company’s shareholders to terminate the Grantee’s Board service at any time.

(b) This Agreement shall be subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.

IN WITNESS WHEREOF, the Grantee has executed this Agreement, and the Company has caused this Agreement to be executed in its name and on its behalf, all as of the date first written above.

JOY GLOBAL INC.

Sean D. Major

Executive Vice President, General Counsel and Secretary

GRANTEE

By:___________________________________________

DEFERRAL ELECTION FORM

RESTRICTED STOCK UNIT AWARD AGREEMENT
UNDER THE
JOY GLOBAL INC. 2007 STOCK INCENTIVE PLAN

If Restricted Stock Units under Paragraph 5 of the Agreement to which this election form is attached would otherwise be settled on the one-year anniversary of the Grant Date (“Deferral-Eligible RSUs”), you have the opportunity to make a one-time election to defer settlement of such restricted stock units. If you wish to make this election, please complete this form and return a signed copy to the Company no later than March 7, 2016. If you do not return this form by that deadline, your Deferral-Eligible RSUs will be settled on the date specified in Paragraph 5 of the Award Agreement without regard to this Deferral Election Form. (Capitalized terms not defined in this form are defined in the Agreement).



Grantee
Grant Date of Restricted Stock Units:		March 8, 2016

If you elect to defer settlement, the Deferral-Eligible RSUs that otherwise would have been settled on the settlement date determined under the Award Agreement will instead be settled in shares of Common Stock at the time you specify below. You will not have any rights (including voting rights) as a shareholder with respect to the Deferral-Eligible RSUs until the Common Stock is actually distributed to you.



Deferral Election	o I hereby elect to defer receipt of all (100%) of my Deferral-Eligible RSUs pursuant to the terms of this Deferral Election Form.
	o I hereby elect to receive my Deferral-Eligible RSUs at the time specified in Paragraph 5 of the Award Agreement.

	My election to defer (if any) does not apply to any Restricted Stock Units that are not Deferral-Eligible RSUs. In addition, my election to defer (if any) will be effective only to the extent that it complies with the requirements of section 409A of the Internal Revenue Code (“§ 409A”) and Treasury Regulation section 1.409A-2(a).

Settlement Date	I hereby irrevocably elect to defer settlement of my Deferral-Eligible RSUs until (select only one of the following): o The one-year anniversary of the date I cease to serve on the Board
	o ____________________ (insert any date (including month, day, and year) that is no earlier than the one-year anniversary of the Grant Date)

	Notwithstanding my deferral election: Ÿ in the event of death or a 409A Disability before the settlement date I elected above, my Deferral-Eligible RSUs shall instead be settled on the date specified in Paragraph 5(a) of the Award Agreement; and Ÿ in the event of a Change in Control that qualifies as an event described in Section 409A(a)(2)(A)(v) of the Code before the settlement date I elected above, my Deferral-Eligible RSUs shall instead be settled on the date specified in Paragraph 6 of the Award Agreement.

By executing this Deferral Election Form, I hereby acknowledge my understanding of, and agreement with, its terms.

_____________________________________________

EXHIBIT 31.1

CERTIFICATIONS

I, Edward L. Doheny II, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Joy Global Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements and other financial information included in this report fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 3, 2016

/s/ Edward L. Doheny II

Edward L. Doheny II

President and Chief Executive Officer

EXHIBIT 31.2

CERTIFICATIONS

I, James M. Sullivan, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Joy Global Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements and other financial information included in this report fairly present, in all material respects, the financial condition, results of operations and cash flows of the registrant as of and for the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 3, 2016

/s/ James. M. Sullivan

James M. Sullivan

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Joy Global Inc. (the “registrant”) on Form 10-Q for the quarter ended April 29, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “report”), we, Edward L. Doheny II and James M. Sullivan, Chief Executive Officer and Chief Financial Officer, respectively, of the registrant, certify, pursuant to 18 U.S.C. § 1350, that to our knowledge:


(1)	The report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and


(2)	The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

Date: June 3, 2016

/s/ Edward L. Doheny II

Edward L. Doheny II

President and Chief Executive Officer

/s/ James M. Sullivan

James M. Sullivan

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

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Form 10-Q JOY GLOBAL INC For: Apr 29

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