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Bucyrus International 10-K 2008
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0001193125-08-149248.txt : 20080710
0001193125-08-149248.hdr.sgml : 20080710
20080710145134
ACCESSION NUMBER: 0001193125-08-149248
CONFORMED SUBMISSION TYPE: 10-K/A
PUBLIC DOCUMENT COUNT: 5
CONFORMED PERIOD OF REPORT: 20071231
FILED AS OF DATE: 20080710
DATE AS OF CHANGE: 20080710

FILER:

COMPANY DATA:
COMPANY CONFORMED NAME: BUCYRUS INTERNATIONAL INC
CENTRAL INDEX KEY: 0000740761
STANDARD INDUSTRIAL CLASSIFICATION: MINING MACHINERY & EQUIP (NO OIL & GAS FIELD MACH & EQUIP) [3532]
IRS NUMBER: 390188050
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231

FILING VALUES:
FORM TYPE: 10-K/A
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-00871
FILM NUMBER: 08946993

BUSINESS ADDRESS:
STREET 1: P O BOX 500
STREET 2: 1100 MILWAUKEE AVENUE
CITY: SOUTH MILWAUKEE
STATE: WI
ZIP: 53172-0500
BUSINESS PHONE: 4147684000

MAIL ADDRESS:
STREET 1: P O BOX 500
STREET 2: 1100 MILWAUKEE AVENUE
CITY: SOUTH MILWAUKEE
STATE: WI
ZIP: 53172-0500

FORMER COMPANY:
FORMER CONFORMED NAME: BUCYRUS ERIE CO /DE
DATE OF NAME CHANGE: 19920703

FORMER COMPANY:
FORMER CONFORMED NAME: BECOR WESTERN INC/DE
DATE OF NAME CHANGE: 19860901


10-K/A
1
d10ka.htm
FORM 10-K AMENDMENT NO. 2


Form 10-K Amendment No. 2



 

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UNITED STATES

STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center">SECURITIES AND EXCHANGE COMMISSION

SIZE="3">Washington, D.C. 20549

 

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Form 10-K/A

(Amendment No. 2)

 

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(Mark One)





xANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
STYLE="margin-top:12px;margin-bottom:0px; text-indent:5%">For the fiscal year ended December 31, 2007

FACE="Times New Roman" SIZE="2">OR

 





¨TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
STYLE="margin-top:12px;margin-bottom:0px; text-indent:5%">For the transition period from              to
            

Commission file number 001-00871

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ALIGN="center">BUCYRUS INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in
its Charter)

 

 

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DELAWARE 39-0188050
(State or Other Jurisdiction of
Incorporation or Organization)
 (I.R.S. Employer
Identification No.)

P. O. BOX 500

SIZE="2">1100 MILWAUKEE AVENUE

SOUTH MILWAUKEE, WISCONSIN

 53172
(Address of Principal Executive Offices) (Zip Code)

(414) 768-4000

ALIGN="center">(Registrant’s Telephone Number, Including Area Code)

 

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Securities registered
pursuant to Section 12(b) of the Act:

Common Stock, $.01 per share

ALIGN="center">Preferred Stock Purchase Rights

Securities registered pursuant to
Section 12(g) of the Act: None

 

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Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  x    No  ¨

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.  Yes  ¨    No  x

SIZE="2">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 (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x    No  FACE="WINGDINGS">¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  ¨

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 “large accelerated filer, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):

 




















Large accelerated filer  x Accelerated filer  ¨
Non-accelerated filer  ¨ Smaller reporting company  ¨
(Do not check if a smaller reporting company) 

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

The aggregate market value
of the registrant’s common stock held by non-affiliates was $2.6 billion as of June 29, 2007, which was the last business day of the registrant’s most recently completed second fiscal quarter.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">As of February 25, 2008, 37,432,848 shares of Class A common stock of the Registrant were outstanding.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">Documents Incorporated by Reference:

 






 1)Portions of our 2007 Annual Report to Stockholders are incorporated by reference in Part II.
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 2)Portions of our Proxy Statement for the Annual Meeting of Stockholders to be held on April 24, 2008 are incorporated by reference in Part III.
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EXPLANATORY NOTE

FACE="Times New Roman" SIZE="2">On February 29, 2008, Bucyrus International, Inc. (the “Company”) filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2007. The Company hereby amends its Annual Report on
Form 10-K to amend Item 15 and the Exhibit Index and to include conformed signatures of Deloitte & Touche LLP (“D&T”) on each of D&T’s reports listed in Item 15 and in D&T’s consent filed as Exhibit
23. These conformed signatures were inadvertently omitted from the original filing of the Company’s Form 10-K. This amendment does not reflect events occurring after the filing of the original Annual Report on Form 10-K. Other than
amending Item 15 and the Exhibit Index and including the conformed signatures of D&T on each of D&T’s reports listed in Item 15 and in D&T’s consent filed as Exhibit 23, this amendment does not modify or update in any
way the disclosures in the Company’s original Annual Report on Form 10-K. The financial statements included within this amendment have not changed since the filing of the Company’s original Annual Report on Form 10-K.

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1








PART IV

 





ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 














































































































































































































(a)

 The following documents are incorporated herein by reference from this Annual Report on Form 10-K and our 2007 Annual Report to Stockholders:
     

Form 10-K

  Annual Report
to
Stockholders
 

1. FINANCIAL STATEMENTS

    
 

    Consolidated Statements of Earnings for the years ended December 31, 2007, 2006 and 2005

  X  
 

    Consolidated Statements of Comprehensive Income for the years ended December 31, 2007, 2006 and
2005

  X  
 

    Consolidated Balance Sheets as of December 31, 2007 and 2006

  X  
 

    Consolidated Statements of Common Stockholders’ Investment for the years ended December 31, 2007, 2006 and
2005

  X  
 

    Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005

  X  
 

    Notes to Consolidated Financial Statements for the years ended December 31, 2007, 2006 and 2005

  X  
 

    Report of Independent Registered Public Accounting Firm –Deloitte & Touche LLP

  X  
 

2. FINANCIAL STATEMENT SCHEDULE

    
 

    Report of Independent Registered Public Accounting Firm – Deloitte & Touche LLP

  X  
 

    Schedule II—Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2007, 2006 and 2005

  X  
 

    All other schedules are omitted because they are inapplicable, not required by the instructions or the information is
included in the consolidated financial statements or notes thereto.

    
(b) 

EXHIBITS

    
 

The exhibits listed in the accompanying Exhibit Index are filed as a part of this Annual Report on Form 10-K.

  X  

 


2








Bucyrus International, Inc.

FACE="Times New Roman" SIZE="2">Consolidated Statements of Earnings

 










































































































































































































































































































































































   Years Ended December 31, 
   2007  2006  2005 
   

(Dollars in thousands,

ALIGN="center">except per share amounts)

 

Sales

  $1,613,391  $738,050  $575,042 

Cost of products sold

   1,205,066   551,275   437,611 
             

Gross profit

   408,325   186,775   137,431 

Selling, general and administrative expenses

   185,639   73,138   54,354 

Research and development expenses

   20,358   10,661   7,225 

Amortization of intangible assets

   29,181   1,792   1,801 
             

Operating earnings

   173,147   101,184   74,051 

Interest expense – net

   24,195   3,693   4,865 

Other income

   —     (818)  (718)

Other expense

   2,394   1,035   987 
             

Earnings before income taxes

   146,558   97,274   68,917 

Income tax expense

   10,424   26,930   15,358 
             

Net earnings

  $136,134  $70,344  $53,559 
             

Net earnings per share data

     

Basic:

     

Net earnings per share

  $3.89  $2.25  $1.76 

Weighted average shares

   35,007,220   31,264,580   30,483,453 

Diluted:

     

Net earnings per share

  $3.85  $2.23  $1.71 

Weighted average shares

   35,357,670   31,539,761   31,246,137 

See notes to consolidated financial statements.

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3








Bucyrus International, Inc.

FACE="Times New Roman" SIZE="2">Consolidated Statements of Comprehensive Income

 

































































































































































































   Years Ended December 31, 
   2007  2006  2005 
   (Dollars in thousands) 

Net earnings

  $136,134  $70,344  $53,559 
             

Other comprehensive income (loss):

     

Foreign currency translation adjustments

   16,811   1,215   (589)

Change in minimum pension liability, net of income tax benefit of $767

   —     4,626   (2,929)

Change in pension and postretirement unrecognized costs, net of income taxes of $5,811

   12,034   —     —   

Derivative fair value changes, net of income tax benefit of $5,073

   (7,518)  —     —   
             

Other comprehensive income (loss)

   21,327   5,841   (3,518)
             

Comprehensive income

  $157,461  $76,185  $50,041 
             

See notes to consolidated financial statements.

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4








Bucyrus International, Inc.

FACE="Times New Roman" SIZE="2">Consolidated Balance Sheets

 




































































































































































































































































































































   December 31, 
   2007  2006 
   (Dollars in thousands,
except per share amounts)
 
ASSETS   

CURRENT ASSETS:

   

Cash and cash equivalents

  $61,112  $9,575 

Receivables – net

   416,584   162,535 

Inventories – net

   494,425   176,277 

Deferred income taxes

   33,630   11,725 

Prepaid expenses and other

   41,038   16,408 
         

Total Current Assets

   1,046,789   376,520 
         

OTHER ASSETS:

   

Goodwill

   317,238   47,306 

Intangible assets-net

   245,836   28,097 

Deferred income taxes

   3,498   16,117 

Other assets

   44,448   7,523 
         

Total Other Assets

   611,020   99,043 
         

PROPERTY, PLANT AND EQUIPMENT:

   

Land

   34,753   4,099 

Buildings and improvements

   196,339   55,439 

Machinery and equipment

   290,727   151,066 

Less accumulated depreciation

   (111,416)  (85,455)
         

Total Property, Plant and Equipment

   410,403   125,149 
         

TOTAL ASSETS

  $2,068,212  $600,712 
         

 


5








Bucyrus International, Inc.

FACE="Times New Roman" SIZE="2">Consolidated Balance Sheets (continued)

 


































































































































































































































































































































































   December 31, 
   2007  2006 
   (Dollars in thousands,
except per share amounts)
 
LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT   

CURRENT LIABILITIES:

   

Accounts payable

  $146,529  $83,603 

Accrued expenses

   149,443   44,121 

Liabilities to customers on uncompleted contracts and warranties

   158,390   32,233 

Income taxes

   55,086   9,978 

Current maturities of long-term debt and short-term obligations

   9,348   331 
         

Total Current Liabilities

   518,796   170,266 
         

LONG-TERM LIABILITIES:

   

Postretirement benefits

   16,007   17,313 

Pension and other

   144,918   34,504 

Deferred income taxes

   50,920   367 
         

Total Long-Term Liabilities

   211,845   52,184 
         

LONG-TERM DEBT, less current maturities

   526,721   82,266 
         

COMMITMENTS AND CONTINGENCIES – Note M

   

COMMON STOCKHOLDERS’ INVESTMENT:

   

Class A common stock – par value $.01 per share, authorized 75,000,000 shares, issued 37,522,337 and 31,685,767 shares in 2007 and
2006, respectively

   375   317 

Additional paid-in capital

   671,341   306,981 

Treasury stock, at cost – 108,600 shares

   (851)  (851)

Accumulated earnings

   142,560   13,451 

Accumulated other comprehensive loss

   (2,575)  (23,902)
         

Total Common Stockholders’ Investment

   810,850   295,996 
         

TOTAL LIABILITIES AND COMMON STOCKHOLDERS’ INVESTMENT

  $2,068,212  $600,712 
         

See notes to consolidated financial statements.

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6








Bucyrus International, Inc.

FACE="Times New Roman" SIZE="2">Consolidated Statements of Common Stockholders’ Investment

 





















































































































































































































































































































































































































































































































































































































































































   Class A
Common
Stock
  Additional
Paid-In
Capital
  Unearned
Restricted
Stock
Compensation
  Treasury
Stock
  Accumulated
Earnings

(Deficit)
  Accumulated
Other
Comprehensive
Loss
 
   (Dollars in thousands) 

Balance at January 1, 2005

  $201  $289,930  $(671) $(851) $(99,850) $(21,691)

Issuance of common stock (849,654 shares)

   6   3,961   —     —     —     —   

Income tax benefit from exercised stock options

   —     4,316   —     —     —     —   

Stock-based compensation expense

   —     —     180   —     —     —   

Restricted stock forfeited (1,800 shares)

   —     (25)  25   —     —     —   

Net earnings

   —     —     —     —     53,559   —   

Dividends declared

   —     —     —     —     (4,672)  —   

Currency translation adjustments

   —     —     —     —     —     (589)

Minimum pension liability adjustment, net of income tax benefit of $1,705

   —     —     —     —     —     (2,929)
                         

Balance at December 31, 2005

   207   298,182   (466)  (851)  (50,963)  (25,209)

Stock split three-for-two

   103   (103)  —     —     —     —   

Cash in lieu of fractional shares

   —     (98)  —     —     —     —   

Issuance of common stock (438,841 shares)

   4   832   —     —     —     —   

Issuance of nonvested common stock (306,075 shares)

   3   (3)  —     —     —     —   

Income tax benefit from exercised stock options

   —     4,353   —     —     —     —   

Stock-based compensation expense

   —     4,284   —     —     —     —   

Reclassification of unearned compensation to additional paid-in-capital upon adoption of SFAS 123(R) – see Note H

   —     (466)  466   —     —     —   

Net earnings

   —     —     —     —     70,344   —   

Dividends declared

   —     —     —     —     (5,930)  —   

Currency translation adjustments

   —     —     —     —     —     1,215 

Minimum pension liability adjustment, net of income taxes of $1,202

   —     —     —     —      4,626 

Adjustment to initially adopt SFAS No. 158, net of income tax benefit of $630 – see Notes K and L

   —     —     —     —     —     (4,534)
                         

 


7








Bucyrus International, Inc.

FACE="Times New Roman" SIZE="2">Consolidated Statements of Common Stockholders’ Investment (continued)

 


























































































































































































































































































































































































   Class A
Common
Stock
  Additional
Paid-In
Capital
  Unearned
Restricted
Stock
Compensation
  Treasury
Stock
  Accumulated
Earnings

(Deficit)
  Accumulated
Other
Comprehensive
Loss
 
   (Dollars in thousands) 

Balance at December 31, 2006

  $317  $306,981  —    $(851) $13,451  $(23,902)

Issuance of common stock (5,331,180 shares)

   53   335,919  —     —     —     —   

Issuance of common stock to purchase DBT (471,476 shares)

   5   21,777  —     —     —     —   

Income tax benefit from exercised stock options and SARs and vesting of restricted stock

   —     265  —     —     —     —   

Stock-based compensation expense

   —     6,171  —     —     —     —   

Board of Director’s fees paid with stock

   —     228  —     —     —     —   

Net earnings

   —     —    —     —     136,134   —   

Dividends declared

   —     —    —     —     (6,920)  —   

Adoption of FIN 48

   —     —    —     —     (105)  —   

Currency translation adjustments

   —     —    —     —     —     16,811 

Change in pension and postretirement cost, net of income taxes of $5,811

   —     —    —     —     —     12,034 

Change in fair value of derivative instruments, net of income tax benefit of $5,073

   —     —    —     —     —     (7,518)
                        

Balance at December 31, 2007

  $375  $671,341  —    $(851) $142,560  $(2,575)
                        

See notes to consolidated financial statements.

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8








Bucyrus International, Inc.

SIZE="2">Consolidated Statements of Cash Flows

 






























































































































































































































































































































































































































































































   Years Ended December 31, 
   2007  2006  2005 
   (Dollars in thousands) 

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net earnings

  $136,134  $70,344  $53,559 

Adjustments to reconcile net earnings to net cash provided by operating activities:

    

Depreciation

   25,438   12,892   11,681 

Amortization

   31,575   2,827   2,788 

Stock compensation expense

   6,171   4,284   180 

Stock issued in payment of director’s fees

   228   81   70 

Deferred income taxes

   (65,548)  275   (9,765)

Tax benefit from exercise of stock options

   —     —     4,316 

Loss on sale of property, plant and equipment

   532   140   273 

Receipt of government grants for training expenses

   —     800   —   

Changes in assets and liabilities, excluding effects of acquisitions:

    

Receivables

   (19,519)  (6,443)  (64,729)

Inventories

   (35,696)  (42,433)  (21,904)

Other current assets

   (26,948)  (8,840)  (1,112)

Other assets

   (42,267)  (414)  1,574 

Current liabilities other than income taxes, short-term obligations and current maturities of long-term debt

   (62,210)  13,848   72,752 

Income taxes

   50,157   (1,171)  7,708 

Long-term liabilities other than deferred income taxes

   95,542   4,740   (7,033)
             

Net cash provided by operating activities

   93,589   50,930   50,358 
             

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Purchases of property, plant and equipment

   (96,268)  (71,306)  (22,164)

Proceeds from sale of property, plant and equipment

   1,923   517   305 

Acquisition of DBT GmbH

   (707,610)  —     —   

DBT GmbH acquisition closing adjustments for liabilities assumed

   26,549   —     —   

Other

   (58)  186   (250)
             

Net cash used in investing activities

   (775,464)  (70,603)  (22,109)
             

 


9








Bucyrus International, Inc.

SIZE="2">Consolidated Statements of Cash Flows (continued)

 


































































































































































































































































































































































































































































   Years Ended December 31, 
   2007  2006  2005 
   (Dollars in thousands) 

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Net borrowings from (repayments of) revolving credit facilities

  $(63,996) $15,299  $63,490 

Proceeds from term loan

   825,000   —     —   

Repayment of term loan

   (326,267)  —     (98,750)

Proceeds from other bank borrowings and long-term debt

   3,481   150   643 

Payments of other bank borrowings and long-term debt

   (24,657)  (1,166)  (321)

Receipt of government grants for facilities expansion

   —     2,000   —   

Payment of financing expenses

   (15,678)  (268)  (591)

Net proceeds from issuance of common stock

   336,289   756   3,896 

Tax benefit related to share-based payment awards

   265   4,353   —   

Dividends paid

   (6,868)  (5,892)  (4,666)

Payment in lieu of fractional shares – stock split

   —     (98)  —   

Other

   34   —     —   
             

Net cash provided by (used in) financing activities

   727,603   15,134   (36,299)
             

Effect of exchange rate changes on cash

   5,809   1,663   (116)
             

Net increase (decrease) in cash and cash equivalents

   51,537   (2,876)  (8,166)

Cash and cash equivalents at beginning of year

   9,575   12,451   20,617 
             

Cash and cash equivalents at end of year

  $61,112  $9,575  $12,451 
             

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

    

Cash paid during the period for:

    

Interest

  $23,818  $4,297  $5,443 

Income taxes-net of refunds

   39,305   26,735   14,462 

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITY:

    

Capital expenditures related to expansion program included in accounts payable

  $621  $3,047   —   

 


10








Bucyrus International, Inc.

SIZE="2">Consolidated Statements of Cash Flows (continued)

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

STYLE="margin-top:6px;margin-bottom:0px">On May 4, 2007, the Company purchased certain assets and assumed certain liabilities of DBT GmbH. In conjunction with the acquisition, liabilities were assumed as
follows:

 




































































   2007 
   (Dollars in thousands) 

Fair value of assets acquired

  $1,303,989 

Cash paid

   (694,822)

Fair value of Company common stock issued

   (21,782)

Acquisition expenses paid

   (12,788)

Accrued acquisition expenses

   (1,813)
     

Liabilities assumed

  $572,784 
     

See notes to consolidated condensed financial statements.

STYLE="margin-top:0px;margin-bottom:0px"> 


11








Bucyrus International, Inc.

SIZE="2">Notes to Consolidated Financial Statements

NOTE A – SUMMARY OF ACCOUNTING POLICIES

STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%">Nature of Operations

Bucyrus
International, Inc. (the “Company”) is a Delaware corporation and a leading designer, manufacturer and marketer of large-scale excavation equipment used in surface mining and, as a result of its acquisition of DBT GmbH (“DBT”) on
May 4, 2007, is also a leading designer, manufacturer and marketer of high technology system solutions for underground coal mining. The Company operates in two business segments: surface mining and underground mining. Major markets for the
surface mining industry are copper, coal, oil sands and iron ore. The major market for the underground mining industry is coal. Most of our surface mining customers are large multinational corporations with operations in the various major surface
mining markets throughout the world. Most of our underground mining customers are multinational coal mining corporations but tend to be smaller in size than our surface mining customers. The Company has more customers overall in the underground
mining segment than in the surface mining segment. In addition to the manufacture of original equipment, an important part of the Company’s business consists of aftermarket sales, such as supplying parts, maintenance and repair services and
technical advice, as well as refurbishing and relocating older, installed original equipment. The Company has manufacturing facilities in Australia, China, Germany, Poland and the United States and service and sales centers in Australia, Brazil,
Canada, Chile, China, England, India, Mexico, Peru, Russia, South Africa and the United States.

Use of Estimates

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. Actual results could differ from those
estimates.

Principles of Consolidation

FACE="Times New Roman" SIZE="2">The consolidated financial statements include the accounts of all subsidiaries. All significant intercompany transactions, profits and accounts have been eliminated.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:4%">Cash Equivalents

All highly liquid
investments with maturities of three months or less when purchased are considered to be cash equivalents. The carrying value of these investments approximates fair value.

FACE="Times New Roman" SIZE="2">Inventories

Inventories are stated at lower of cost (first-in, first-out method) or net realizable
value. The cost of finished goods and work in progress includes the cost of raw materials, other direct costs and production overheads. Net realizable value is the estimate of the selling price in the ordinary course of business, less the cost of
completion and selling. Provision is made to reduce the cost to net realizable value for obsolete and slow-moving inventories. Advances from

 


12









customers are netted against inventories to the extent of related accumulated costs. Advances in excess of related costs and earnings on uncompleted
contracts are classified as a liability to customers. Advances netted against inventory costs were $3.3 million and zero at December 31, 2007 and 2006, respectively.

FACE="Times New Roman" SIZE="2">Goodwill and Intangible Assets

Goodwill and intangible assets are accounted for in accordance with
Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”) (see Note E). Intangible assets consist primarily of technology, customer relationships, engineering
drawings, trademarks, trade names and backlog.

Property, Plant and Equipment

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Depreciation is provided over the estimated useful lives of respective assets using the straight-line method for financial reporting and accelerated
methods for income tax purposes. Estimated useful lives used for financial reporting purposes range from 10 to 40 years for buildings and improvements and three to 17 years for machinery and equipment.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:4%">Capitalized Interest

Under certain
conditions, the Company capitalizes interest as part of the acquisition cost of an asset. Interest is capitalized only during the period of time required to complete and prepare the asset for its intended use. For the years ended December 31,
2007 and 2006, the Company capitalized $1.2 million and $0.8 million, respectively, of interest as a part of the cost of a multi-phase expansion of its manufacturing facilities.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:4%">Impairment of Long-Lived Assets

The
Company continually evaluates whether events and circumstances have occurred that indicate the remaining estimated useful lives of property, plant and equipment and intangible assets with finite lives may warrant revision or that the remaining
balance of each may not be recoverable. The Company accounts for any impairment of long-lived assets in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived
Assets.”

Financial Instruments

FACE="Times New Roman" SIZE="2">Based on Company estimates, the carrying amounts of cash equivalents, receivables, accounts payable, accrued liabilities and variable rate debt approximated fair value at December 31, 2007 and 2006.


Foreign Currency Translation

The
assets and liabilities of foreign subsidiaries are translated into U.S. dollars using year-end exchange rates. Sales and expenses are translated at average rates during the year. Adjustments resulting from this translation are deferred and reflected
as a separate component of Common Stockholders’ Investment. Gains and losses from foreign currency transactions are included in Selling, General and Administrative Expenses in the Consolidated Statements of Earnings. Transaction losses totaled
$2.5 million and $1.0 million for the years ended December 31, 2007 and 2006, respectively, and transaction gains totaled $1.0 million for the year ended December 31, 2005. Transaction gains and losses on intercompany advances to foreign
subsidiaries for which settlement is not planned or anticipated in the foreseeable future are deferred and reflected as a component of Common Stockholders’ Investment.

SIZE="1"> 


13








Derivative Financial Instruments

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The Company has entered into foreign exchange forward contracts in order to manage and preserve the economic value of cash flows in non-functional
currencies. At December 31, 2007, the Company’s domestic operations had financial contracts outstanding to purchase 82.2 Australian dollars at a total price of $72.0 million, to purchase 1.8 million euros at a total price of
$2.6 million and to purchase 2.2 million British pounds at a total price of $4.5 million. The Company’s operations in Australia have contracts outstanding to purchase $21.5 million at a total price of 26.5 million Australian
dollars. The Company’s operations in Germany have contracts outstanding to purchase $75.2 million at a total purchase price of 58.1 million euros and 45.3 million Polish zloty at a total purchase price of 12.1 million euros. The
Company’s operations in South Africa have contracts outstanding to purchase $3.4 million at a total purchase price of 24.3 million South African rand and 0.3 million euros at a total purchase price of 3.0 million South African
rand. The Company’s operations in the United States have contracts to purchase 5.2 million euros at a total price of $7.2 million. Based upon year-end exchange rates, all outstanding contracts are recorded at fair value. The Company
conducts its business on a multinational basis in a wide variety of foreign currencies and hedges foreign currency exposures arising from various receivables, liabilities and expected inventory purchases. Derivative instruments that are utilized to
hedge the foreign currency risk associated with anticipated inventory purchases in foreign currencies are designated as cash-flow hedges. Gains and losses on these instruments, to the extent that they have been effective, are deferred in other
comprehensive income (loss) and recognized in earnings when the related inventory is sold. Ineffectiveness related to these hedge relationships is recognized currently in the Consolidated Statements of Earnings and was not significant. The maturity
of these instruments does not exceed 12 months.

To manage a portion of the Company’s exposure to changes in LIBOR-based interest
rates on its variable rate debt, the Company entered into two interest rate swap agreements that effectively fix the interest payments on $200.0 million of its outstanding borrowings under its term loan facility. The first swap matures on
May 4, 2010 and currently fixes the variable portion of the interest rate on term loan facility borrowings in the notional amount of $150.0 million at 4.88%, plus the applicable spread based on terms of the credit facility. The second swap also
matures on May 4, 2010 and currently fixes the interest rate at 5.094%, plus the applicable spread in the notional amount of $50.0 million. The swaps have been designated as cash flow hedges of LIBOR-based interest payments. In accordance with
Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”), the effective portion of the change in fair value of the derivatives is recorded in
other comprehensive income (loss), while any ineffective portion is recorded as an adjustment to interest expense. The differential paid or received on the interest rate swaps will be recognized as an adjustment to interest expense.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">The Company also has cross-currency foreign currency-denominated debt obligations that are designated as hedges of the foreign currency exposure
associated with its net investments in non-U.S. operations. The currency effects of the debt obligations are reflected in other comprehensive income (loss) where they offset translation gains and losses recorded on the Company’s net investments
in Germany.

The Company also uses forward foreign exchange contracts to reduce the exchange rate risk of specific foreign currency
denominated transactions. The Company has designated these hedges as either cash flow hedges or fair value hedges in accordance with SFAS No. 133.

 


14








The Company also uses natural hedges to mitigate risks associated with foreign currency exposures. For
example, oftentimes the Company has non-functional currency denominated receivables from customers for which the exposure is partially mitigated by a corresponding non-functional currency payable to a vendor.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:4%">Stock Split

On March 8, 2006,
the Company’s Board of Directors authorized a three-for-two split of the Company’s Class A common stock. The stock split was paid on March 29, 2006 to Company stockholders of record on March 20, 2006. The Company’s
Class A common stock began trading on a split-adjusted basis on March 30, 2006. All references in the accompanying consolidated financial statements and notes thereto to net earnings per share and the number of shares have been adjusted to
reflect this stock split, except for the Consolidated Statements of Common Stockholders’ Investment which reflect the stock split by reclassifying from Additional Paid-In Capital to Class A Common Stock an amount equal to the par value of
the additional shares issued to effect the stock split.

Comprehensive Income (Loss)

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Statement of Financial Accounting Standards No. 130, “Reporting Comprehensive Income,” requires the reporting of comprehensive income
(loss) in addition to net income (loss). Comprehensive income (loss) is a more inclusive financial reporting method that includes disclosure of financial information that historically has not been recognized in the calculation of net income (loss).
The Company reports comprehensive income (loss) and accumulated other comprehensive loss in the Consolidated Statements of Common Stockholders’ Investment. Accumulated other comprehensive loss, net of income taxes, was as follows:


 




























































































   December 31, 
   2007  2006 
   (Dollars in thousands) 

Foreign currency translation adjustments

  $12,130  $(4,681)

Pension and postretirement benefit unrecognized costs

   (7,187)  (19,221)

Derivative fair value adjustment

   (7,518)  —   
         

Accumulated other comprehensive loss

  $(2,575) $(23,902)
         

Revenue Recognition

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Revenue from long-term sales contracts, such as for the manufacture of the Company’s machines and certain replacement parts, is recognized using the
percentage-of-completion method prescribed by Statement of Position No. 81-1 due to the length of time to fully manufacture and assemble the Company’s machines or replacement parts. The Company measures revenue recognized based on the
ratio of actual costs incurred to date in relation to total estimated costs to be incurred. The percentage-of-completion method of accounting for these contracts most accurately reflects the status of these uncompleted contracts in the
Company’s consolidated financial statements and most accurately measures the matching of

 


15









revenues with expenses. The Company also has long-term maintenance and repair contracts with customers. Under these contracts, the Company provides all
replacement parts, regular maintenance services and necessary repairs for the excavation equipment at a particular mine with an on-site support team. In addition, some of these contracts call for Company personnel to operate the equipment being
serviced. Parts consumed and services provided are charged to cost of products sold and sales are calculated and recorded based on the parts and service utilization. The customer is billed monthly and a liability for deferred revenues is recorded if
payments received exceed revenues recognized. At the time a loss on a contract becomes known, the amount of the estimated loss is recognized in the consolidated financial statements. Revenue from all other types of sales, primarily sales of
aftermarket parts, net of estimated returns and allowances, is recognized in conformity with Staff Accounting Bulletin No. 104, when all of the following circumstances are satisfied: persuasive evidence of an arrangement exists, the price is
fixed or determinable, collectibility is reasonably assured, and delivery has occurred or services have been rendered. Criteria for revenue recognition is generally met at the time products are shipped, as the terms are FOB shipping point.

Included in the current portion of liabilities to customers on uncompleted contracts and warranties are advances in excess of related
costs and earnings on uncompleted contracts of $86.8 million and $25.1 million at December 31, 2007 and 2006, respectively.

SIZE="2">Warranty

Sales of the Company’s products generally carry typical manufacturers’ warranties, the majority of which
cover products for one year, based on terms that are generally accepted in the marketplace. The Company records provisions for estimated warranty and other related costs as revenue is recognized based on historical warranty loss experience and
periodically adjusts these provisions to reflect actual experience.

Shipping and Handling Fees and Costs

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Revenue received from shipping and handling fees is reflected in sales. Shipping fee revenue was insignificant for all periods presented. Shipping and
handling costs are included in cost of products sold.

Income Taxes

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Deferred taxes are provided to reflect temporary differences between the financial and tax basis of assets and liabilities using presently enacted tax
rates and laws. A valuation allowance is recognized if it is more likely than not that some or all of the deferred tax assets will not be realized.

SIZE="2">Stock–Based Compensation

The Company adopted Statement of Financial Accounting Standards No. 123 (revised 2004),
“Share-Based Payment” (“SFAS 123R”), on January 1, 2006 using the modified prospective application method. Previously, the Company accounted for stock-based compensation arrangements in accordance with Accounting Principles
Board Opinion No. 25, “Accounting for Stock Issued to Employees,” as allowed by Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”). There was no pro
forma effect on net earnings and net earnings per share for 2005 based on the fair value model as prescribed by SFAS 123.

 


16








SFAS 123R requires a classification change in the Statement of Cash Flows whereby the income tax benefit
from stock option exercises is reported as a financing cash flow rather than as an operating cash flow as previously reported. The $4.4 million excess tax benefit classified as a financing cash inflow for the year ended December 31, 2006 would
have been classified as an operating cash inflow prior to the adoption of SFAS 123R. SFAS 123R also requires any remaining debit in Common Stockholders’ Investment related to unearned stock compensation be reclassified to the appropriate equity
accounts.

NOTE B – DBT ACQUISITION

SIZE="2">On May 4, 2007, the Company completed its acquisition of DBT from RAG Coal International AG (“RAG Coal”). DBT is based in Lünen, Germany. Through the Company’s acquisition subsidiary, DBT Holdings GmbH, the Company
acquired DBT for $694.8 million in cash and 471,476 shares of the Company’s common stock with an initial market value of $21.8 million, calculated using the average per share closing price of the Company’s common stock from
December 13, 2006 through December 20, 2006 (the reasonable period before and after the date the terms of the acquisition were agreed to and announced). Expenses related to the acquisition totaled $14.6 million. The net assets acquired and
results of operations since the date of acquisition are included in the Company’s consolidated financial statements.

The acquisition
of DBT enabled the Company to expand its product portfolio to include underground mining equipment and aftermarket support for that equipment, which enhances its capability to serve a larger segment of the global mining equipment market. The
acquisition also increases the Company’s strategic presence in markets that it expects will experience substantial mining growth over the next several years. These factors contributed to a purchase price resulting in the recognition of
goodwill. This goodwill is not deductible for income tax purposes.

The acquisition of DBT was accounted for under the purchase method of
accounting. Under purchase accounting, the total purchase price was allocated to the tangible and intangible assets and liabilities assumed based on their respective fair values as of the date of the DBT acquisition. The principles of purchase
accounting require extensive use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values. Accordingly, the
purchase price allocation is preliminary and is subject to final adjustments. Such adjustments could be significant. The final valuation is expected to be completed as soon as practicable but no later than 12 months after the date of the DBT
acquisition.

The preliminary purchase price was determined as follows (dollars in thousands):

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 

















































Cash

  $694,822

Issuance of common shares

   21,782

Liabilities assumed

   450,086

Deferred tax impact of purchase accounting

   122,698

Acquisition expenses

   14,601
    

Total preliminary purchase price

  $1,303,989
    

 


17








Major categories of liabilities assumed included liabilities to customers on uncompleted contracts of
$92.3 million, pension liabilities of $117.2 million, warranty liabilities of $74.8 million and trade accounts payable of $55.9 million.

SIZE="2">The preliminary allocation of the purchase price was as follows (dollars in thousands):

 












































Current assets

  $549,598

Property, plant and equipment

   209,000

Intangible assets (including goodwill of 269,932)

   516,931

Other long-term assets

   28,460
    

Total preliminary purchase price allocation

  $1,303,989
    

Pro Forma Results of Operations

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The following unaudited pro forma results of operations assumes that the Company acquired DBT on January 1, 2006 and 2007 and includes the effects of
the Company’s debt refinancing (see Note G) and equity offering (see Note H). The pro forma results include adjustments to reflect additional interest expense, depreciation expense and amortization of intangibles, as well as the effects of
adjustments made to the carrying value of certain assets.

 










































































   Years Ended December 31,
   2007  2006
   

(Dollar in thousands,

FACE="Times New Roman" SIZE="1">except per share amounts)

Sales

  $1,973,904  $1,933,948

Net earnings

  $146,864  $113,687

Net earnings per share:

    

Basic

  $3.95  $3.07

Diluted

  $3.92  $3.05

The pro forma financial information presented above is not necessarily indicative of either the
results of operations that would have occurred had the acquisition of DBT been effective on January 1, 2006 and 2007 or of the Company’s future operations. Also, the pro formal financial information does not reflect the costs which the
Company may incur to integrate DBT, and these costs may be material.

Finished parts and work in process inventories have been adjusted to
their estimated fair market value as required by Statement of Financial Accounting Standards No. 141, “Business Combinations.” Finished parts were valued at their estimated selling prices, less the sum of (a) costs of disposal
and (b) a reasonable profit allowance for the Company’s selling effort, and work in process was valued at estimated selling prices of finished goods less the sum of (a) costs to complete, (b) costs of disposal, and (c) a
reasonable profit allowance for the completing and selling effort of the Company based on profit for similar finished goods. As this inventory adjustment was directly attributed to the transaction and will not have a continuing impact, it is not
reflected in the pro forma results of operations presented above. However, this inventory adjustment is resulting in a charge to cost of products sold in the periods subsequent to the consummation of the acquisition of DBT during which the related
inventories are sold. The actual charge for the year ended December 31, 2007 was $23.3 million. The remaining estimated charge is $12.1 million and is expected to be fully amortized as a charge to cost of sales by the end of the second quarter
of 2008.

 


18








NOTE C – RECEIVABLES

FACE="Times New Roman" SIZE="2">Receivables at December 31, 2007 and 2006 included $161.6 million and $77.0 million, respectively, of revenues from long-term contracts which were not billable at these dates. Billings on long-term contracts are
made in accordance with the terms as defined in the individual contracts. The unbilled receivables are for contracts that were near completion as of the balance sheet dates and collection of amounts due was scheduled to be within the next 12 months
of such dates.

Current receivables were reduced by an allowance for losses of $8.1 million and $0.8 million at December 31, 2007 and
2006, respectively.

 


19








NOTE D – INVENTORIES

FACE="Times New Roman" SIZE="2">Inventories consisted of the following:

 










































































   December 31,
   2007  2006
   (Dollars in thousands)

Raw materials and parts

  $113,244  $45,392

Work in process

   132,998   30,794

Finished products (primarily replacement parts)

   248,183   100,091
        
  $494,425  $176,277
        

NOTE E – GOODWILL AND INTANGIBLE ASSETS

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">In accordance with SFAS 142, goodwill is not subject to amortization, but instead is subject to an evaluation for impairment at least annually by applying
a two-step fair-value-based test. Additionally, intangible assets with indefinite lives are not amortized, but are subject to an evaluation for impairment at least annually. Intangible assets with finite lives continue to be amortized over a period
of five to 20 years. For goodwill, the fair value of the Company’s reporting units exceeded the carrying amounts and an impairment charge was not required. The Company also completed an impairment analysis of its indefinite life intangible
assets in accordance with the provisions of SFAS 142 and determined that an impairment charge was not required.

Intangible assets
consisted of the following:

 
































































































































































































































































































































   December 31, 2007  December 31, 2006 
   Weighted
Average
SIZE="1">Life
  Gross
Carrying

Amount
  Accumulated
Amortization
  Weighted
Average
SIZE="1">Life
  Gross
Carrying

Amount
  Accumulated
Amortization
 
   (Years)  (Dollars in thousands)  (Years)  (Dollars in thousands) 

Amortized intangible assets:

           

Technology

  12  $115,000  $(6,389) —     —     —   

Customer relationships

  20   112,000   (3,733) —     —     —   

Engineering drawings

  20   25,500   (13,094) 20  $25,500  $(11,818)

Backlog

  1   8,000   (5,333) —     —     —   

Trademarks

  0.7   12,000   (12,000) —     —     —   

Other

  5 - 20   5,855   (4,406) 5 - 20   5,844   (3,865)
                     
    $278,355  $(44,955)   $31,344  $(15,683)
                     

Unamortized intangible assets:

           

Trademarks/Trade names

    $12,436     $12,436  
               

 


20








Changes in the carrying amount of goodwill in 2007 was as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 






























































   Surface
Mining
  Underground
Mining
   (Dollars in thousands)

Balance at January 1, 2007

  $47,306   —  

Goodwill acquired during the year

   —    $269,932
        

Balance at December 31, 2007

  $47,306  $269,932
        

Amortization expense for finite-lived intangible assets was $29.2 million, $1.8 million and $1.8
million for the years ended December 31, 2007, 2006 and 2005, respectively. The estimated future amortization expense of finite-lived intangible assets is as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 


























































   (Dollars in thousands)

2008

  $19,411

2009

   16,601

2010

   16,601

2011

   16,601

2012

   16,601

Future

   147,585
    
  $233,400
    

NOTE F – ACCRUED EXPENSES

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Accrued expenses consisted of the following:

 


































































   December 31,
   2007  2006
   (Dollars in thousands)

Wages and salaries

  $55,186  $13,708

Other

   94,257   30,413
        
  $149,443  $44,121
        

 


21








NOTE G – LONG-TERM DEBT AND FINANCING ARRANGEMENTS

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">Long-term debt consisted of the following:

 


























































































































   December 31, 
   2007  2006 
   (Dollars in thousands) 

Revolving credit facility

  $15,130  $78,789 

Term loan facility

   509,184   —   

Other

   11,755   3,687 
         
   536,069   82,476 

Less current maturities of long-term debt

   (9,348)  (210)
         
  $526,721  $82,266 
         

The Company entered into new credit facilities, as amended and restated on May 25, 2007, to
finance the acquisition of DBT and refinance certain existing indebtedness. The new credit facilities include a secured revolving credit facility of $375.0 million, an unsecured German revolving credit facility of €65.0 million, each of
which mature on May 4, 2012, and a term loan facility of $400.0 million plus €75.0 million with a maturity date of May 4, 2014. The entire secured revolving credit facility may be used for letters of credit. The credit facilities
replaced the Company’s previous $200.0 million revolving credit facility.

Borrowings under the secured revolving credit facility bear
interest, payable no less frequently than quarterly, at (1) LIBOR plus between 1.25% and 1.75% (based on the Company’s total leverage ratio) for U.S. dollar denominated LIBOR loans, (2) a base rate determined by reference to the
greater of the U.S. prime lending rate and the federal funds rate plus between 0.25% and 0.75% (based on the Company’s total leverage ratio) for U.S. dollar denominated base rate loans and (3) EURIBOR plus between 1.25% and 1.75% (based on
the Company’s total leverage ratio) for Euro denominated loans. The interest rates under the secured revolving credit facility are subject to change based on the Company’s total leverage ratio. Under each revolving credit facility, the
Company has agreed to pay a commitment fee based on the unused portion of such facilities, payable quarterly, at rates ranging from 0.25% to 0.50% depending on the total leverage ratio, and when applicable, customary letter of credit fees.
Borrowings under the term loan facility bear interest, payable no less frequently than quarterly, at (a) LIBOR plus 1.50% for U.S. dollar denominated LIBOR loans, (2) the base rate plus 0.50% for U.S. dollar denominated base rate loans and
(3) EURIBOR plus 1.75% for Euro denominated loans.

At December 31, 2007, the Company had borrowings under the secured revolving
credit facility of $15.1 million. The amount available for borrowings under the secured revolving credit facility was $234.4 million (taking into account $125.5 million of issued letters of credit). The Company had no borrowings under the unsecured
German credit facility at December 31, 2007. At December 31, 2007, the Company also had borrowings under the term loan facility of $509.2 ($399.0 million plus €74.8 million) million at a weighted average rate of 6.4%.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">The Company’s obligations under the credit facilities are guaranteed, on a joint and several basis, by certain of its domestic subsidiaries. In
addition, the Company’s obligations under the secured revolving credit facility and the term loan facility are secured by a security

 


22









interest in substantially all of its consolidated tangible and intangible domestic assets (subject to certain exceptions), as well as 100% of the outstanding
capital stock of its domestic subsidiaries and 65% of the voting stock and 100% of the non-voting stock of certain of its first-tier foreign subsidiaries.

FACE="Times New Roman" SIZE="2">The credit facilities contain operating and financial covenants that, among other things, could limit the Company’s ability to obtain additional sources of capital. The financial covenants require the Company to
maintain a total leverage ratio, calculated on a trailing four-quarters basis, of not more than 4.0 to 1.0 through the end of the quarter ending December 31, 2008 and not more than 3.5 to 1.0 for each measurement period thereafter. The total
leverage ratio is calculated as the ratio of consolidated indebtedness (which is net of cash) to consolidated operating profit (which excludes, among other things, certain non-cash charges, as discussed more fully in the credit facilities). At
December 31, 2007, the Company was in compliance with all covenants and other requirements under its credit facilities.

The average
revolving credit facility borrowings under the Company’s credit agreements for the year ended December 31, 2007 were $48.3 million at a weighted average interest rate of 6.6%, and the maximum borrowing outstanding was $114.5 million. The
average borrowings under the revolving portion of the Company’s credit agreement during 2006 were $59.7 million at a weighted average interest rate of 6.9%, and the maximum borrowing outstanding was $111.8 million.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">At December 31, 2007 and 2006, there were $176.1 million and $76.2 million, respectively, of standby letters of credit outstanding under all of the
Company’s bank facilities.

Maturities of long-term debt for each of the next five years are as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 






































   (Dollars in thousands)

2008

  $9,348

2009

   7,422

2010

   6,586

2011

   6,633

2012

   21,679

NOTE H – COMMON STOCKHOLDERS’ INVESTMENT

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">At December 31, 2007, the Company’s issued and outstanding shares consist only of Class A common stock. Holders of Class A common
stock are entitled to one vote per share on all matters to be voted on by the Company’s common stockholders. On March 8, 2006, the Company’s Board of Directors authorized, and stockholders approved on May 3, 2006 at the 2006
annual meeting of stockholders, an increase in the number of authorized shares of the Company’s Class A common stock to 75,000,000 shares. This increase in authorized shares became effective upon filing the Company’s Amended and
Restated Certificate of Incorporation with the State of Delaware on May 3, 2006. At December 31, 2007, the Company also has authorized but not issued 25,000,000 shares of Class B common stock and 10,000,000 shares of preferred stock.

On August 2, 2007, the Company’s Board of Directors declared a dividend of one preferred share purchase right (a
“Right”) for each outstanding share of the Company’s Class A common stock. The dividend was payable upon the close of business on September 3, 2007 to the stockholders of record upon the close of business on August 16,
2007. Each Right entitles the registered holder to purchase one one-hundredth of a share of Series A Junior Participating

 


23









Preferred Stock at a price of $200.00 per one one-hundredth of a share, subject to adjustment. The Rights are not exercisable unless certain change in
control events occur, such as a person or group acquiring or obtaining the right to acquire beneficial ownership of 15% or more of the Company’s outstanding common stock. The Rights will expire on August 2, 2017 unless the Rights are
earlier redeemed or exchanged by the Company in accordance with the terms of the Rights Agreement.

On May 15, 2007, the Company sold
5,306,100 shares of its Class A common stock in an underwritten public offering at a price to the public of $66.35 per share, from which it received net proceeds of $336.1 million. The Company used the net proceeds from this equity offering to
repay a portion of its new term loan facility used to initially finance the acquisition of DBT.

On July 28, 2004, the Company
completed an IPO of 18,543,750 shares of its Class A common stock at an offering price of $12 per share, from which the Company received net proceeds, after commissions and expenses, of $129.8 million. Subsequent to the IPO, the Company paid
quarterly cash dividends of $.0383 per share (equal to $.153 per year). Effective with the stock split, the Company’s Board of Directors authorized a 30% increase in the quarterly dividend to the amount of $.05 per share per quarter for
dividends payable after the date of the March 2006 stock split.

NOTE I – STOCK-BASED COMPENSATION

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">At December 31, 2007, the Company had 2,160,543 shares of its Class A common stock available for awards under the Bucyrus International, Inc.
Omnibus Incentive Plan 2007 (“2007 Plan”) (formerly the Bucyrus International, Inc. 2004 Equity Incentive Plan). The 2007 Plan expires on the tenth anniversary of its effective date, unless terminated earlier by the Company’s Board of
Directors. The 2007 Plan provides for the grant of equity based awards, including restricted (or nonvested) stock, restricted stock units, stock options, stock appreciation rights (“SARs”), and other equity based awards to the
Company’s directors, officers, and other employees, advisors and consultants and those of the Company’s subsidiaries who are selected by the Compensation Committee of the Company’s Board of Directors for participation in the
2007 Plan. Also as of December 31, 2007, the Company had 246,000 shares of its Class A common stock available for future grants under the 1998 Management Stock Option Plan. The Compensation Committee of the Company’s Board of
Directors determines all of the terms and conditions of awards under the plan, including whether the vesting or payment of an award will be subject to the attainment of performance goals.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">The Company recognizes compensation expense for nonvested shares, SAR’s and stock options over the requisite service period for vesting of the
award. Total stock-based compensation expense included in the Company’s Consolidated Statements of Earnings was $6.2 million, $4.3 million and $0.2 million for the years ended December 31, 2007, 2006 and 2005, respectively.

Nonvested Shares – The Company granted nonvested shares to certain employees in 2007, 2006 and 2004. The nonvested shares
granted in 2007 fully cliff vest on December 31, 2010 and the nonvested shares granted in 2004 fully cliff vest four years from the date of grant. The nonvested shares granted in 2006 fully cliff vest on December 31, 2009, although the
vesting period may be accelerated based on the attainment of certain defined annual financial goals of the Company. The Company did attain these goals for the years ended December 31, 2007 and 2006 and 25% of the shares fully vested in each of
those years. Compensation expense related to nonvested shares was $2.7 million, $2.1 million and $0.2 million for the years ended December 31, 2007, 2006 and 2005, respectively, and was reported in Selling, General and Administrative Expenses
in the Consolidated Statements of Earnings.

 


24








Nonvested share activity was as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 





























































































































































































   2007  2006  2005
   Number
of
Shares
  Weighted
Average
SIZE="1">Grant Date
Fair Value
  Number
of
Shares
  Weighted
Average
SIZE="1">Grant Date
Fair Value
  Number
of
Shares
  Weighted
Average

Grant Date
FACE="Times New Roman" SIZE="1">Fair Value

Nonvested at January 1,

  198,150  $40.39  34,200  $20.00  36,000  $20.00

Granted

  45,025   54.91  218,550   42.74  —     —  

Forfeited

  (600)  68.37  (48,900)  39.01  (1,800)  20.00

Vested

  (46,944)  43.45  (5,700)  20.00  —     —  
               

Nonvested at December 31,

  195,631  $42.91  198,150  $40.39  34,200  $20.00
               

At December 31, 2007, there was $5.7 million of unrecognized compensation expense related to
nonvested share grants. This cost is expected to be recognized over a weighted-average period of 2.2 years. The grant date fair value was based on the fair market value of the Company’s Class A common stock on the date of grant. At
December 31, 2007, the Company expected 188,878 shares to vest and these shares had an aggregate intrinsic value of $18.8 million and a weighted-average remaining contractual term of 2.2 years. The total fair value of shares vested during 2007
and 2006 was $4.4 million and $0.3 million, respectively.

Premium Nonvested Shares – In 2006, the Company granted premium
nonvested shares to certain employees. These shares partially vest if specific performance levels are attained by the Company. Any nonvested premium shares credited to employees will fully cliff vest on December 31, 2009 if the employee is
still employed by the Company on that date. The Company did attain the specific performance levels for the years ended December 31, 2007 and 2006, which resulted in the partial vesting of 50% of the nonvested premium shares. Compensation
expense related to premium nonvested shares was $0.6 million and $0.5 million for the years ended December 31, 2007 and 2006, respectively, and was reported in Selling, General and Administrative Expenses in the Consolidated Statements of
Earnings.

 


25








Premium nonvested share activity was as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 





























































































































   2007  2006
   Number
of
Shares
  Weighted
Average
SIZE="1">Grant Date
Fair Value
  Number
of
Shares
  Weighted
Average
SIZE="1">Grant Date
Fair Value

Nonvested at January 1,

  87,525  $43.08  —     —  

Granted

  6,362   48.45  109,275  $42.74

Forfeited

  —     —    (21,750)  41.37

Vested

  —     —    —     —  
          

Nonvested at December 31,

  93,887  $43.45  87,525  $43.08
          

At December 31, 2007, there was $1.1 million of unrecognized compensation expense related to
nonvested premium share grants. This cost is expected to be recognized over a weighted-average period of two years. The grant date fair value was based on the fair market value of the Company’s Class A common stock on the date of grant. At
December 31, 2007, the Company expected 92,933 shares to vest and these shares had an aggregate intrinsic value of $9.2 million and a weighted-average remaining contractual life of two years.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">SARs – In 2006 and 2007, the Company granted SARs to certain employees. The SARs vest incrementally over four years and can be settled in
shares only. Compensation expense related to SAR’s granted to certain employees in 2007 and 2006 was $2.9 million and $1.7 million for the years ended December 31, 2007 and 2006, respectively, and was reported in Selling, General and
Administrative Expenses in the Consolidated Statements of Earnings.

SAR activity was as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 


































































































































































   2007  2006
   Number
of
Shares
  Weighted
Average
SIZE="1">Grant Date
Fair Value
  Number
of
Shares
  Weighted
Average
SIZE="1">Grant Date
Fair Value

Outstanding at January 1,

  350,100  $21.37  —     —  

Granted

  158,150   27.37  437,100  $21.20

Forfeited

  (2,400)  33.57  (87,000)  20.52

Exercised

  (3,375)  23.86  —     —  
          

Outstanding at December 31,

  502,475  $23.18  350,100  $21.37
          

Exercisable at December 31,

  34,180  $21.30  —     —  
          

 


26








At December 31, 2007, there was $7.0 million of unrecognized compensation expense related to SARs
that are vested or expect to vest. This cost is expected to be recognized over a weighted-average period of 2.4 years. The grant date fair value of the SARs was calculated using the Black-Sholes pricing model. The assumptions used in this model were
as follows:

 




















































   2007  2006 

Risk-free interest rate

  4.66% 4.37%

Expected volatility

  42.00% 43.25%

Expected life

  7 years  7 years 

Dividend yield

  .41% .43%

The risk-free interest rate was based on the current U.S. Treasury rate for a bond of seven years,
the expected life of the SARs. The expected volatility was based on the historical activity of the Company’s Class A common stock. The expected life was based on the average of the vesting term of four years and the original contract term
of 10 years. The expected dividend yield was based on the annual dividends which have been paid on the Company’s Class A common stock. At December 31, 2007, the Company expected 479,173 SARs to vest and these SARs had an aggregate
intrinsic value of $26.1 million and a weighted-average remaining contractual life of 8.5 years.

Stock Options – There was no
compensation expense related to stock options for the years ended December 31, 2007, 2006 and 2005.

Stock option activity was as
follows:

 





































































































































































































































   2007  2006  2005
   Options  Weighted
Average
SIZE="1">Grant Date
Fair Value
  Options  Weighted
Average
SIZE="1">Grant Date
Fair Value
  Options  Weighted
Average

Grant Date
FACE="Times New Roman" SIZE="1">Fair Value

Options outstanding at January 1,

  9,600  $8.33  446,586  $1.87  1,293,600  $3.66

Options granted

  —     —    —     —    —     —  

Options forfeited

  —     —    —     —    —     —  

Options exercised

  (9,600)  8.33  (436,986)  1.73  (847,014)  4.60
               

Options outstanding at December 31,

  —     —    9,600  $8.33  446,586  $1.87
               

Options exercisable at December 31,

  —     —    9,600  $8.33  446,586  $1.87
               

Net cash proceeds from the exercise of stock options was $0.1 million, $0.8 million and $3.9
million for the years ended December 31, 2007, 2006 and 2005, respectively. The income tax benefit realized was $0.1 million, $4.4 million and $4.3 million for the years ended December 31, 2007, 2006 and 2005, respectively.

STYLE="margin-top:0px;margin-bottom:0px"> 


27








NOTE J – INCOME TAXES

FACE="Times New Roman" SIZE="2">Earnings before income taxes consisted of the following:

 






















































































   Years Ended December 31,
   2007  2006  2005
   (Dollars in thousands)

United States

  $72,015  $62,547  $44,240

Foreign

   74,543   34,727   24,677
            

Total

  $146,558  $97,274  $68,917
            

The provision for income tax expense (benefit) consisted of the following:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 































































































































































































































































































































   Years Ended December 31, 
   2007  2006  2005 
   (Dollars in thousands) 

Foreign income taxes:

    

Current

  $46,162  $12,454  $10,067 

Deferred

   (36,586)  (1,478)  (560)
             

Total

   9,576   10,976   9,507 
             

Federal income taxes:

    

Current

   27,205   11,729   14,215 

Deferred

   (26,739)  3,538   (10,460)
             

Total

   466   15,267   3,755 
             

Other (state and local taxes):

    

Current

   2,605   2,472   841 

Deferred

   (2,223)  (1,785)  1,255 
             

Total

   382   687   2,096 
             

Total income tax expense

  $10,424  $26,930  $15,358 
             

 


28








Total income tax expense differs from amounts expected by applying the federal statutory income tax rate
to earnings before income taxes as follows:

 

































































































































































































   Years Ended December 31, 
   2007  2006  2005 
   (Dollars in thousands) 

Tax expense at federal statutory rate

  $51,296  $34,046  $24,121 

Valuation allowance adjustments

   7,192   (944)  —   

Impact of foreign subsidiary income, tax rates and tax credits

   (14,955)  (1,503)  (328)

Tax impact of repatriation of non-U.S. earnings and foreign tax credits

   (18,725)  (4,308)  (8,788)

State income taxes

   2,424   447   1,679 

Extraterritorial income exclusion

   —     (893)  (1,439)

Deferred impact of German statutory tax rate change

   (12,244)  —     —   

Other items

   (4,564)  85   113 
             

Total income tax expense

  $10,424  $26,930  $15,358 
             

 


29








Significant components of deferred tax assets and deferred tax liabilities were as follows:


 






































































































































































































































































   December 31, 
   2007  2006 
   (Dollars in thousands) 

Deferred tax assets:

   

Postretirement benefits

  $6,637  $6,185 

Pension benefits

   27,600   11,265 

Accrued and other liabilities

   14,291   9,346 

Tax loss carry forward

   15,895   8,104 

Alternative minimum tax credit carry forward

   479   479 

Foreign tax credit carry forward

   26,029   12,216 

Other items

   4,024   3,128 
         
   94,955   50,723 

Less valuation allowance

   (9,959)  (2,767)
         

Total deferred tax assets

   84,996   47,956 
         

Deferred tax liabilities:

   

Excess of book basis over tax basis of property, plant and equipment and intangible assets

   (110,497)  (17,757)

Derivative financial instruments

   (5,073)  —   

Inventory

   (6,618)  (2,844)
         

Total deferred tax liabilities

   (122,188)  (20,601)
         

Net deferred tax assets (liabilities)

  $(37,192) $27,355 
         

The classification of the net deferred tax assets and liabilities was as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 






































































































   December 31, 
   2007  2006 
   (Dollars in thousands) 

Current deferred tax assets

  $33,630  $11,725 

Long-term deferred tax assets

   3,498   16,117 

Current deferred tax liabilities

   (23,400)  (120)

Long-term deferred tax liabilities

   (50,920)  (367)
         

Net deferred tax assets (liabilities)

  $(37,192) $27,355 
         

The current deferred tax liability is included in Income Taxes in the Consolidated Balance Sheets.

 


30








A valuation allowance must be used to reduce the net deferred tax assets to an amount that is more likely
than not to be realized. Currently, the Company has valuation allowances established for U.S. state net operating loss (“NOL”) carry forwards and United Kingdom deferred tax assets. A roll-forward of the valuation allowance was as follows:

 










































































   Balance at
Beginning of
FACE="Times New Roman" SIZE="1">Period
  Additions -
Allowance
FACE="Times New Roman" SIZE="1">Established
  Deductions -
Allowance
FACE="Times New Roman" SIZE="1">Used
  Balance at
End of Period
   (Dollars in thousands)

Year ended December 31, 2005

  $3,711  $—    $—    $3,711

Year ended December 31, 2006

  $3,711  $—    $944  $2,767

Year ended December 31, 2007

  $2,767  $7,550  $358  $9,959

At December 31, 2007, the Company had available approximately $7.1 million of federal NOL
carry forwards from the years 1991 through 1994 that expire in the years 2008 and 2009, to offset against future federal taxable income. Because the 1994 consummation of the Second Amended Joint Plan of Reorganization of B-E Holdings, Inc. and
the Company as modified on December 1, 1994 (the “Amended Plan”) resulted in an “ownership change” within the meaning of Section 382 of the Internal Revenue Code, the use of such NOL is limited to $3.6 million per year.

At December 31, 2007, the Company also had $60.2 million of state NOL carry forwards, which expire in the years 2008 through 2019,
available to offset future state taxable income in various states.

At December 31, 2007, the Company also had a federal alternative
minimum tax credit carry forward of $0.5 million, which carries forward indefinitely. Because this credit carry forward arose prior to the effective date of the Amended Plan, it is subject to the annual limitations discussed above and is not usable
until the year 2010.

Cumulative undistributed earnings of foreign subsidiaries that are considered to be permanently reinvested and on
which U.S. income taxes have not been provided by the Company, amounted to approximately $114.2 million at December 31, 2007. It is not practicable to estimate the amount of additional tax which would be payable upon repatriation of such
earnings; however, due to foreign tax credit limitations, higher effective U.S. income tax rates and foreign withholding taxes, additional taxes could be incurred.

FACE="Times New Roman" SIZE="2">The Company adopted Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”), on January 1, 2007. As a result of the
implementation of FIN 48, the Company recognized a net decrease to retained earnings of $0.1 million. On the adoption date, the Company had $0.3 million of unrecognized tax benefits consisting of $0.7 million of FIN 48 liabilities and $0.4 million
of income taxes receivable, all of which would affect its effective tax rate if recognized. At December 31, 2007, the Company had $1.1 million of unrecognized tax benefits, all of which would affect it effective tax rate if recognized. These
unrecognized tax benefits consisted of $1.6 million of FIN 48 liability and $0.5 million of income taxes receivable. The FIN 48 reserve increased by $0.9 million since January 1, 2007. The Company does not presently expect any reasonably
possible material changes to the estimated amount of liability associated with its uncertain tax positions during the next year.

 


31








A reconciliation of the total amounts of unrecognized tax benefits was as follows (dollars in thousands):

 












































Balance at January 1, 2007

  $721

Gross increases related to current period tax positions

   643

Gross increases related to prior periods of acquired companies

   46

Foreign currency translation

   164
    

Balance at December 31, 2007

  $1,574
    

The Company is continuing its practice of recognizing interest and/or penalties related to income
tax matters as a component of income tax expense. At the date of adoption of FIN 48, the Company had accrued $0.3 million of interest and penalties. An additional $0.1 million of interest and penalties were accrued during 2007, resulting in a
balance of $0.4 million at December 31, 2007.

The Company has completed its evaluation of the required FIN 48 liability in connection
with the acquisition of DBT and its impact on the overall purchase price allocation and concluded that no material FIN 48 liability existed as of May 4, 2007. DBT files income tax returns in the United States, Germany and other foreign
jurisdictions.

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and in various state and
foreign jurisdictions. Open tax years related to U.S. state jurisdictions remain subject to examination but are not considered material. The Company is subject to income tax examinations by tax authorities in the major jurisdictions as follows:

 












































Tax Jurisdiction

  

Years Open to Audit

U. S. Federal  1990, 1991, 1999, 2001, 2004, 2005, 2006, 2007
Australia  2003 through 2007
China  1998 through 2007
Germany  2004 through 2007
Poland  2002 through 2007
Russia  2005 through 2007
South Africa  2004 through 2007
Untied Kingdom  2006 through 2007

NOTE K – PENSION AND RETIREMENT PLANS

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The Company has several pension and retirement plans covering certain of its employees in the United States and Europe. All plans have a measurement date
of December 31.

The Bucyrus International, Inc. Supplemental Executive Retirement Plan (“SERP”), which became effective on
October 20, 2006 and applied to 2006, provides an allocation to the Company’s senior management equal to the amount that cannot be allocated to such employees under the Company’s cash balance pension plan due to the Internal Revenue
Service-imposed annual compensation limits. Benefits are to be paid under the SERP upon the employee’s separation from service in a lump sum or in five or 10 annual installments, as the participating employee elects.

STYLE="margin-top:0px;margin-bottom:0px"> 


32








The Company adopted Statement of Financial Accounting Standards No. 158, “Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and 132(R)” (“SFAS No. 158”), on December 31, 2006. SFAS No. 158 requires companies to
recognize the funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its balance sheet and to recognize changes in that funded status in the year in which the changes occur through
comprehensive income. SFAS No. 158 also requires an employer to measure the funded status of a plan as of the date of its year-end balance sheet.

FACE="Times New Roman" SIZE="2">The Company’s defined benefit pension and retirement plans’ funded status and amounts recognized in the consolidated financial statements at December 31, 2007 and 2006 was as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 






































































































































































































































































































































































































































































































































   U.S. Plans  Non-U.S. Plans 
   2007  2006  2007 
   (Dollars in thousands) 

Change in projected benefit obligation:

    

Projected benefit obligation at January 1,

  $96,808  $99,510   —   

Acquired projected benefit obligation

   —     —    $117,182 

Service cost

   2,595   2,531   764 

Interest cost

   5,415   5,220   3,507 

Plan amendments

   158   —     —   

Actuarial gain

   (3,224)  (3,641)  (12,882)

Benefits paid

   (6,475)  (6,812)  (3,544)

Currency translation

   —     —     8,186 
             

Projected benefit obligation at December 31,

   95,277   96,808   113,213 
             

Change in plan assets:

    

Fair value of plan assets at January 1,

   70,584   59,870   —   

Actual return on plan assets

   3,472   7,925   —   

Employer contributions

   10,394   9,601   3,544 

Benefits paid

   (6,475)  (6,812)  (3,544)
             

Fair value of plan assets at December 31,

   77,975   70,584   —   
             

Unfunded status at December 31,

  $(17,302) $(26,224) $(113,213)
             

Amounts recognized in consolidated balance sheets at December 31,:

    

Accrued expenses

   —     —    $(6,759)

Noncurrent pension and other

  $(17,302) $(26,244)  (106,454)
             
  $(17,302) $(26,244) $(113,213)
             

Amounts recognized in accumulated other comprehensive income at December 31,:

    

Net (gain) loss, net of income tax (benefit) of $(8,482), $(9,140) and $4,303, respectively

  $14,473  $15,595  $(9,144)

Prior service cost, net of income tax benefit of $1,387, $1,494 and $0, respectively

   2,365   2,551   —   
             

Net amount recognized

  $16,838  $18,146  $(9,144)
             

 


33















































































   U.S. Plans  Non-U.S. Plans 
   2007  2006    
   (Dollars in thousands) 

Weighted-average assumptions used to determine benefit obligations at December 31:

    

Discount rate

  6.25% 5.75% 5.5%

Rate of compensation increase

  4% 4% 1.75%

The accumulated benefit obligation for all defined benefit pension plans was $205.6 million and
$95.5 million at December 31, 2007 and 2006, respectively. Pension plans with an accumulated benefit obligation in excess of plan assets were as follows:

 








































































   U.S. Plans  Non-U.S. Plans
   December 31,  December 31,
   2007  2006  2007
   (Dollars in thousands)

Projected benefit obligation

  $95,278  $96,808  $113,213

Accumulated benefit obligation

   93,615   95,463   111,978

Fair value of plan assets

   77,976   70,584   —  

The components of net periodic benefit cost and other amounts recognized in other comprehensive
income were as follows:

 











































































































































































































































































































































































































































   U.S. Plans  Non-U.S. Plans 
   2007  2006  2005  2007 
   (Dollars in thousands) 

Net periodic benefit cost:

     

Service cost

  $2,595  $2,531  $2,147  $764 

Interest cost

   5,415   5,220   5,294   3,507 

Expected return on plan assets

   (6,169)  (5,198)  (5,210)  —   

Amortization of prior service cost

   452   452   452   —   

Amortization of net actuarial loss

   1,253   1,700   1,575   —   
                 

Net periodic benefit cost

   3,546   4,705   4,258   4,271 
                 

Other changes in plan assets and benefit obligations recognized in other comprehensive income:

     

Net (gain) loss

   (1,122)  15,595   —     (9,144)

Net prior service cost

   (186)  2,551   —     —   
                 

Total recognized in other comprehensive income

   (1,308)  18,146   —     (9,144)
                 

Total recognized in net periodic benefit cost and other comprehensive income

  $2,238  $22,851  $4,258  $(4,873)
                 

Weighted-average assumptions used to determine net periodic benefit cost for the year:

     

Discount rate

   5.75%  5.50%  5.75%  4.5%

Expected return on plan assets

   8.50%  8.50%  9%  —   

Rate of compensation increase

   4%  4%  4%  1.75%

 


34








In selecting the expected long-term rate of return on assets, the Company considered the average rate of
earnings expected on the classes of funds invested or to be invested to provide for the benefits of these plans. This included considering the trusts’ targeted asset allocation for the year and the expected returns likely to be earned over the
next 20 years. The assumptions used for the return of each asset class are conservative when compared to long-term historical returns.

SIZE="2">The Company’s pension plans’ weighted-average actual and targeted asset allocations by asset category at December 31, 2007 and 2006 were as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 

































































































































   U.S. Plans 
   December 31, 2007  December 31, 2006 
   Actual  Target  Actual  Target 

Asset category:

     

Equity securities

  64% 65% 66% 65%

Debt securities

  36% 35% 34% 35%
             

Total

  100% 100% 100% 100%
             

The desired investment objective is a long-term real rate of return on assets that is
approximately 6% greater than the assumed rate of inflation measured by the Consumer Price Index, currently assumed to be approximately 3%. The target rate of return for the plans has been based upon an analysis of historical returns supplemented
with an economic and structural review of each asset class. The Benefit Plan Committee of the Company realizes that market performance varies and that a 6% real rate of return may not be meaningful during some periods. The Benefit Plan Committee
also realizes that historical performance is no guarantee of future performance.

To achieve these goals the minimum and maximum allocation
ranges for fixed securities and equity securities are as follows:

 

















































   U.S. Plans 
   Minimum  Maximum 

Equity

  63% 67%

Fixed

  33% 37%

Cash equivalents

  0% 2%

Investment in international oriented equity funds is limited to a maximum of 18.25% of the equity
range.

The Company expects to contribute $11.1 million to its domestic pension plans and $6.8 million to its non-U.S. pension plans in
2008.

 


35








Estimated future benefit payments from the Company’s pension plans are as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 






































































   U.S. Plans  Non-U.S. Plans
   (Dollars in thousands)

2008

  $7,180  $6,759

2009

   7,106   6,989

2010

   8,245   7,093

2011

   7,551   7,306

2012

   8,255   7,490

2013-2017

   47,073   38,543

The estimated net loss and prior service cost for the U.S. defined benefit pension plans that will
be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year are $1.1 million and $0.5 million, respectively. The estimated net gain for the non-U.S. defined benefit pension plans that will be
amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $0.1 million

The Company
has 401(k) Savings Plans available to substantially all United States employees. Matching employer contributions are made in accordance with plan provisions subject to certain limitations. Matching employer contributions made were $3.1 million, $1.5
million and $1.1 million in 2007, 2006 and 2005, respectively.

NOTE L – POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The Company provides certain health care benefits to age 65 and life insurance benefits for certain eligible retired United States employees.
Substantially all current employees may become eligible for those benefits if they reach early retirement age while working for the Company. The measurement date is December 31.

SIZE="1"> 


36








The Company’s postretirement benefits other than pensions funded status and amounts recognized in
the consolidated financial statements at December 31, 2007 and 2006 was as follows:

 


























































































































































































































































































































































































   2007  2006 
   (Dollars in thousands) 

Change in benefit obligation:

   

Benefit obligation at January 1,

  $18,674  $20,184 

Service cost

   1,049   1,020 

Interest cost

   966   978 

Plan participants’ contributions

   129   148 

Net actuarial gain

   (2,747)  (2,534)

Benefits paid

   (704)  (1,122)
         

Benefit obligation at December 31,

   17,367   18,674 
         

Change in plan assets:

   

Fair value of plan assets at January 1,

   —     —   

Employer contributions

   575   974 

Plan participants’ contributions

   129   148 

Benefits paid

   (704)  (1,122)
         

Fair value of plan assets at December 31,

   —     —   
         

Unfunded status at December 31,

  $(17,367) $(18,674)
         

Amounts recognized in consolidated balance sheets at December 31,:

   

Current benefit liability

  $(1,360) $(1,360)

Long-term benefit liability

   (16,007)  (17,314)
         

Net amount recognized

  $(17,367) $(18,674)
         
   December 31, 
   2007  2006 
   (Dollars in thousands) 

Amounts recognized in accumulated other comprehensive income at December 31,:

   

Net loss, net of income tax benefit of $106 and $1,156, respectively

  $233  $1,972 

Prior service credit, net of income taxes of $433 and $526, respectively

   (740)  (897)
         

Net amount recognized

  $(507) $1,075 
         

Weighted-average assumptions used to determine benefit obligations at December 31,: discount rate

   6.25%  5.75%

 


37








The components of net periodic benefit cost and other amounts recognized in other comprehensive income
were as follows:

 













































































































































































































































































































































   Years Ended December 31, 
   2007  2006  2005 
   (Dollars in thousands) 

Net periodic benefit cost:

    

Service cost

  $1,049  $1,020  $928 

Interest cost

   965   978   1,070 

Amortization of prior service cost

   (249)  (249)  (249)

Amortization of net actuarial loss

   12   175   311 
             

Net periodic benefit cost

   1,777   1,924   2,060 
             

Other changes in benefit obligations recognized in other comprehensive income:

    

Net loss

   (1,739)  1,972   —   

Net prior service credit

   157   (897)  —   
             

Total recognized in other comprehensive income

   (1,582)  1,075   —   
             

Total recognized in net periodic benefit cost and other comprehensive income

  $195  $2,999  $2,060 
             

Weighted average assumptions used to determine net periodic benefit cost - discount rate

   5.75%  5.50%  5.75%

Assumed health care cost trend rates:

    

Health care cost trend rate assumed for next year

   5%  6%  7%

Rate to which the cost trend rate is assumed to decline

   5%  5%  5%

Year that the rate reaches the ultimate trend rate

   2008   2008   2008 

Assumed health care cost trend rates have a significant effect on the amounts reported for the
health care plan. A one percentage point change in assumed health care cost trend rates would have the following effects:

 











































   One Percentage Point
Increase
  One Percentage Point
Decrease
 
   (Dollars in thousands) 

Effect on total of service and interest cost

  $229  $(196)

Effect on postretirement benefit obligation

   1,423   (1,255)

The Company expects to contribute approximately $1.2 million for the payment of benefits from its
postretirement benefit plan in 2008.

 


38








Estimated future benefit payments from the Company’s postretirement benefit plan are as follows:

 











































   (Dollars in thousands)

2008

  $1,187

2009

   1,185

2010

   1,291

2011

   1,456

2012

   1,516

2013-2017

   9,922

The estimated prior service cost that will be amortized from accumulated other comprehensive
income into net periodic benefit cost over the next fiscal year is $0.2 million.

NOTE M – CALCULATION OF NET EARNINGS PER SHARE OF COMMON STOCK

Basic net earnings per share of common stock was computed by dividing net earnings by the weighted average number of shares of common
stock outstanding. Diluted net earnings per share of common stock was computed by dividing net earnings by the weighted average number of shares of common stock outstanding after giving effect to dilutive securities. The reconciliation of the
numerators and the denominators of the basic and diluted net earnings per share of common stock calculations for the years ended December 31, 2007, 2006 and 2005 was as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 














































































































































































   Years Ended December 31,
   2007  2006  2005
   (Dollars in thousands)

Net earnings

  $136,134  $70,344  $53,559
            

Weighted average shares outstanding

   35,007,220   31,264,580   30,483,453
            

Basic net earnings per share

  $3.89  $2.25  $1.76
            

Weighted average shares outstanding

   35,007,220   31,264,580   30,483,453

Effect of dilutive stock options, nonvested shares, stock appreciation rights and performance shares

   350,450   275,181   762,684
            

Weighted average shares outstanding – diluted

   35,357,670   31,539,761   31,246,137
            

Diluted net earnings per share

  $3.85  $2.23  $1.71
            

 


39








NOTE N – SEGMENT AND GEOGRAPHICAL INFORMATION

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The Company has two reportable segments, surface mining and underground mining, which are based on the internal organization used by management for making
operating decisions, measuring and evaluating financial performance, allocating resources, and based on the similarity of customers served, distinctive products and services, common use of facilities and economic results attained. Prior to the
acquisition of DBT, all of the Company’s operations were in surface mining and were classified as one operating segment. As a result, disclosures of segment information for prior years are not presented since the Company’s underground
mining segment did not exist prior to the acquisition of DBT on May 4, 2007.

The accounting policies of the segments are the same as
those described in Note A. The operating income (loss) of segments does not include interest expense, other income and expense and a provision for income taxes. Corporate expenses consist primarily of costs related to employees who provide
services across both of the Company’s segments. There are no significant intersegment sales. Identifiable assets are those used in the operations in each segment.

FACE="Times New Roman" SIZE="2">Segment information for the year ended December 31, 2007 was as follows:

 



































































































































































































































































































   Sales  Operating
Earnings
  Depreciation
and
SIZE="1">Amortization
  Capital
Expenditures
  Total
Assets
   (Dollars in thousands)

Surface mining

  $927,101  $165,238  $16,829  $81,169  $781,123

Underground mining

   686,290   18,269   37,790   15,712   1,287,089
                    

Total operations

   1,613,391   183,507   54,619   96,881   2,068,212

Corporate

   —     (10,360)  —     —     —  
                    

Consolidated total

  $1,613,391   173,147   54,619  $96,881  $2,068,212
               

Interest income

     3,523      

Interest expense

     (27,718)     

Other expense

     (2,394)  2,394    
              

Earnings before income taxes

    $146,558  $57,013    
              

 


40








Financial information by geographical area is set forth in the following table. In the case of sales to
external customers, the amounts presented represent the sales originating in the respective geographic area.

 














































































































































































































































































   Sales to
External Customers
  Long – Lived
Assets
   (Dollars in thousands)

2007

    

United States

  $760,027  $226,476

Africa

   69,381   4,207

Australia

   300,743   48,847

Chile

   108,522   4,262

Canada

   55,807   7,431

Germany

   226,079   94,171

Other foreign

   92,832   25,009
        
  $1,613,391  $410,403
        

2006

    

United States

  $379,794  $112,651

Africa

   36,527   950

Australia

   118,896   443

Chile

   96,344   3,570

Canada

   50,158   5,984

Other foreign

   56,331   1,551
        
  $738,050  $125,149
        

2005

    

United States

  $306,959  $51,775

Africa

   37,509   994

Australia

   76,151   248

Chile

   63,398   3,929

Canada

   41,972   6,024

Other foreign

   49,053   1,185
        
  $575,042  $64,155
        

The Company does not consider itself to be dependent upon any single customer or group of
customers; however, on an annual basis a single customer may account for a large percentage of sales, particularly new machine sales. In 2007, no one customer accounted for more than approximately 10% of the Company’s consolidated sales. In
2006 and 2005, one customer accounted for approximately 13% and 14%, respectively, of the Company’s consolidated sales.

 


41








NOTE O – COMMITMENTS, CONTINGENCIES, CREDIT RISKS AND CONCENTRATIONS

STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%">Environmental

The Company’s
operations and properties are subject to a broad range of federal, state, local and foreign laws and regulations relating to environmental matters, including laws and regulations governing discharges into the air and water, the handling and disposal
of solid and hazardous substances and wastes, and the remediation of contamination associated with releases of hazardous substances at the Company’s facilities and at off-site disposal locations. These laws are complex, change frequently and
have tended to become more stringent over time. Future events, such as required compliance with more stringent laws or regulations, more vigorous enforcement policies of regulatory agencies or stricter or different interpretations of existing laws,
could require additional expenditures by the Company, which may be material.

Environmental problems have not interfered in any material
respect with the Company’s manufacturing operations to date. The Company believes that its compliance with statutory requirements respecting environmental quality will not materially affect its capital expenditures, earnings or competitive
position. The Company has an ongoing program to address any potential environmental problems.

Certain environmental laws, such as the
Federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), provide for strict, joint and several liability for investigation and remediation of spills and other releases of hazardous substances. Such laws may
apply to conditions at properties currently or formerly owned or operated by an entity or its predecessors, as well as to conditions at properties at which wastes or other contamination attributable to an entity or its predecessors come to be
located.

The Company has previously been named as a potentially responsible party under CERCLA and analogous state laws at other sites
throughout the United States. The Company believes it has determined its remediation liabilities with respect to the sites discussed above and does not believe that any such remaining liabilities, if any, either individually or in the aggregate,
will have a material adverse effect on its business, financial condition, results of operations or cash flows. The Company cannot, however, assure that it will not incur additional liabilities with respect to these sites in the future, the costs of
which could be material, nor can it assure that it will not incur remediation liability in the future with respect to sites formerly or currently owned or operated by the Company or with respect to off-site disposal locations, the costs of which
could be material.

Over the past three years, expenditures for ongoing compliance, remediation, monitoring and cleanup have been
immaterial. While no assurance can be given, the Company believes that expenditures for compliance and remediation will not have a material effect on its future capital expenditures, results of operations or competitive position.

STYLE="margin-top:0px;margin-bottom:0px"> 


42








Product Warranty

FACE="Times New Roman" SIZE="2">The Company recognizes the cost associated with its warranty policies on its products as revenue is recognized. The amount recognized is based on historical experience. The following is a reconciliation of the changes
in accrued warranty costs for the years ended December 31, 2007 and 2006 was as follows:

 











































































































   2007  2006 
   (Dollars in thousands) 

Balance at January 1,

  $5,788  $5,977 

Effect of DBT acquisition

   74,803   —   

Provision

   9,001   4,046 

Charges

   (22,943)  (4,235)

Currency translation

   4,260   —   
         

Balance at December 31,

  $70,909  $5,788 
         

Product Liability

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The Company is normally subject to numerous product liability claims, many of which relate to products no longer manufactured by the Company or its
subsidiaries, and other claims arising in the ordinary course of business in federal and state courts. Such claims are generally related to property damage and to personal injury. The Company’s products are operated by its employees and its
customers’ employees and independent contractors at various work sites in the United States and abroad. In the United States, workers’ claims against employers related to workplace injuries are generally limited by state workers’
compensation statutes, but such limitations do not apply to equipment suppliers. The Company has insurance covering most of these claims and has various limits of liability depending on the insurance policy year in question. It is the view of
management that the final resolution of these claims and other similar claims which are likely to arise in the future will not individually or in the aggregate have a material effect on the Company’s financial position, results of operations or
cash flows, although no assurance to that effect can be given.

Asbestos Liability

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">The Company has been named as a co-defendant in approximately 299 personal injury liability cases alleging damages due to exposure to asbestos and other
substances, involving approximately 575 plaintiffs. The Company does not believe that costs associated with these matters will have a material effect on its financial position, results of operations or cash flows, although no assurance to that
effect can be given.

The reconciliation of claims pending at December 31, 2007 and 2006 was as follows:

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 




































































   2007  2006 

Number of claims pending at January 1,

  290  309 

New claims filed

  29  6 

Claims dismissed, settled or resolved

  (20) (25)
       

Number of claims pending at December 31,

  299  290 
       

 


43








The average claim settlement amount was immaterial in both years.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:4%">Other Litigation

A wholly owned
subsidiary of the Company is a defendant in a suit pending in the United States District Court for the Western District of Pennsylvania, brought on June 15, 2002, relating to an incident in which a dragline operated by an employee of the
subsidiary tipped over. The owner of the dragline has sued an unaffiliated third party on a negligence theory for property damages and business interruption losses in a range of approximately $25.0 million to $27.0 million. The unrelated third party
has brought a third-party action against the Company’s subsidiary. The Company’s insurance carriers defended the claim. The Company’s subsidiary was granted a motion of summary judgement approximately one year ago and the
plaintiff’s appealed that decision. On November 16, 2007, the United States Court of Appeals for the Third Circuit entered an opinion affirming the ruling of the District Court. Thus, the court has affirmed the granting of the summary
motion and this case has been dismissed.

A wholly owned Australian subsidiary of the Company is a defendant in a lawsuit in Queensland,
Australia relating to a contractual claim in which the plaintiff, pursuant to a contract with the Company’s subsidiary, agreed to erect a dragline sold by the Company to a customer for use at its mine site. The plaintiff asserts various
contractual claims related to breach of contract damages and other remedies related to its claim that it was owed amounts for services rendered under the contract. This claim was settled by the parties in late 2006, pending finalization of dismissal
of the legal proceedings, for AUS $2.7 million (US $2.1 million) plus legal costs, which have been paid to the Company. This matter has been concluded and we are awaiting the final dismissal order.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">The Company is involved in various other litigation arising in the normal course of business. It is the view of management that the Company’s
recovery or liability, if any, under pending litigation is not expected to have a material effect on the Company’s financial position, results of operations or cash flows, although no assurance to that effect can be given.

STYLE="margin-top:18px;margin-bottom:0px; margin-left:4%">Commitments

The Company has
obligations under various operating leases and rental and service agreements. The expense relating to these agreements was $17.0 million in 2007, $10.1 million in 2006 and $8.7 million in 2005. Future minimum annual payments under non-cancelable
agreements are as follows:

 


























































   (Dollars in thousands)

2008

  $11,749

2009

   8,619

2010

   6,097

2011

   5,216

2012

   3,529

After 2012

   17,276
    
  $52,486
    

In addition, the Company has contractual obligations of $22.3 million with respect to the third
phase of its multi-phase expansion program at its South Milwaukee facility, which is expected to be completed by the end of the first quarter of 2008.

 


44








Credit Risks

FACE="Times New Roman" SIZE="2">A significant portion of the Company’s sales are to customers whose activities are related to the coal, copper, oil sands and iron ore mining industries, including some who are located in foreign countries. The
Company generally extends credit to these customers and, therefore, collection of receivables may be affected by the mining industry economy and the economic conditions in the countries where the customers are located. However, the Company closely
monitors extension of credit and has not experienced significant credit losses. Also, most foreign sales are made to large, well-established companies. The Company generally requires letters of credit on foreign sales to smaller companies.

Concentrations

The
Company currently purchases alternating current drives and other electrical parts, an important component of its equipment, from Siemens Energy & Automation, Inc. (“Siemens”). The loss of Siemens, the Company’s only
critical sole source supplier, could cause a delay in manufacturing and a possible loss of sales, which could have a material adverse effect on the Company’s business.

FACE="Times New Roman" SIZE="2">NOTE P – QUARTERLY RESULTS (UNAUDITED)

Certain unaudited quarterly financial results for the
years ended December 31, 2007 and 2006 were as follows:

 
































































































































































































































































































   Quarters Ended at End of
   March  June  September  December
   (Dollars in thousands, except per share amounts)

Sales:

        

2007

  $190,361  $374,801  $500,278  $547,951

2006

   165,653   181,804   184,980   205,613

Gross profit:

        

2007

  $52,078  $96,297  $123,628  $136,322

2006

   40,873   46,934   47,894   51,074

Net earnings:

        

2007 (1)

  $17,863  $27,762  $28,602  $61,907

2006 (2)

   14,522   21,558   16,720   17,544

Basic net earnings per common share:

        

2007

  $.57  $.81  $.77  $1.67

2006

   .47   .69   .53   .56

Weighted average shares outstanding-basic (in thousands):

        

2007

   31,330   34,375   37,115   37,122

2006

   31,192   31,285   31,289   31,291

Diluted net earnings per common share:

        

2007

  $.57  $.80  $.76  $1.64

2006

   .46   .68   .53   .56

 


45































































































































   Quarters Ended at End of
   March  June  September  December
   (Dollars in thousands, except per share amounts)

Weighted average shares outstanding-diluted (in thousands):

        

2007

   31,608   34,703   37,486   37,654

2006

   31,527   31,616   31,499   31,518

Dividends per common share – Class A common stock:

        

2007

  $.05  $.05  $.05  $.05

2006

   .0383   .05   .05   .05

 





(1)Net earnings for the quarter ended December 31, 2007 includes a $12.2 million deferred tax benefit resulting from a reduction in the German statutory tax rate and an $18.7
million foreign tax credit benefit resulting from repatriation of non-U.S. earnings.




(2)Net earnings for the quarter ended June 30, 2006 includes a net income tax benefit of approximately $3.7 million related to foreign tax credits (see Note J).

 


46








REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

STYLE="margin-top:6px;margin-bottom:0px">To the Board of Directors and Stockholders of

SIZE="2">    Bucyrus International, Inc.:

We have audited the accompanying consolidated balance sheets of Bucyrus International,
Inc. and subsidiaries (the “Company”) as of December 31, 2007 and 2006, and the related consolidated statements of earnings, comprehensive income, common stockholders’ investment, and cash flows for each of the three years in the
period ended December 31, 2007. We also have audited the Company’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at DBT
GmbH, which was acquired on May 4, 2007 and whose financial statements constitute 62 % of total assets and 43 % of revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2007.
Accordingly, our audit did not include the internal control over financial reporting at DBT GmbH. The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and
for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on these financial
statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement and
whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

SIZE="2">A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected
by the company’s board of directors, management, and other personnel 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

 


47








Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion
or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting
to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

STYLE="margin-top:12px;margin-bottom:0px">As described in Note A to the Consolidated Financial Statements, on January 1, 2006, the Company adopted Statement of Financial Accounting Standards
No. 123 (revised 2004), “Share-Based Payment.” As described in Note K to the Consolidated Financial Statements, on December 31, 2006, the Company adopted Statement of Financial Accounting Standards No. 158,
“Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and 132(R)”. As described in Note J to the Consolidated Financial Statements, on
January 1, 2007, the Company adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109.”

FACE="Times New Roman" SIZE="2">In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Bucyrus International, Inc. and subsidiaries as of December 31, 2007 and
2006, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2007, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion,
the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on the criteria established in Internal Control — Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission.

 














/s/ Deloitte & Touche LLP
Milwaukee, Wisconsin
February 28, 2008

 


48








MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

STYLE="margin-top:6px;margin-bottom:0px">To the Board of Directors and Stockholders of

Bucyrus International, Inc.:

The management of Bucyrus International, Inc. and subsidiaries (the “Company”) is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Securities and Exchange Act of 1934. The Company’s internal control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of published financial statements in accordance with generally accepted accounting principles.

FACE="Times New Roman" SIZE="2">The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer and Secretary, assessed the effectiveness of the Company’s internal control over
financial reporting based on the criteria established in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, the Company’s management has
concluded that, as of December 31, 2007, the Company’s internal control over financial reporting was effective based on those criteria. Management has excluded DBT GmbH from its assessment of internal control over financial reporting as of
December 31, 2007 because it was acquired by the Company in May 2006. The total assets and total revenue of DBT GmbH represent approximately 62% and 43%, respectively, of the Company’s consolidated financial statement amounts as of and for
the year ended December 31, 2007.

Because of its inherent limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of the effectiveness to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

The Company’s independent registered public accounting firm has issued an audit report on the
effectiveness of the Company’s internal control over financial reporting as of December 31, 2007, which is included herein.

 




















/s/ Timothy W. Sullivan

President and Chief Executive Officer
February 28, 2008

/s/ Craig R. Mackus

Chief Financial Officer and Secretary
February 28, 2008

 


49








REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

STYLE="margin-top:6px;margin-bottom:0px">To the Board of Directors and Stockholders of

SIZE="2">    Bucyrus International, Inc.:

We have audited the consolidated financial statements of Bucyrus International, Inc. and
subsidiaries (the “Company”) as of December 31, 2007 and 2006, and for each of the three years in the period ended December 31, 2007, and the Company’s internal control over financial reporting as of December 31, 2007,
and have issued our reports thereon dated February 28, 2008 (which report expresses an unqualified opinion and includes an explanatory paragraph concerning the adoption of Statement of Financial Accounting Standards No. 123 (revised 2004),
“Share-Based Payment” in 2006, the adoption of Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements
No. 87, 88, 106, and 132(R) in 2006, and FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109” in 2007); such consolidated financial statements and reports
are included in your 2007 Annual Report to Stockholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of the Company listed in Item 15. This consolidated financial statement
schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

 














/s/ Deloitte & Touche LLP
Milwaukee, Wisconsin
February 28, 2008

 


50








Bucyrus International, Inc.

SIZE="2">Schedule II – Valuation and Qualifying Accounts and Reserves

For the Years Ended December 31, 2007, 2006 and 2005

 




































































































   Balance at
Beginning
of

FACE="Times New Roman" SIZE="1">Period
  Charges (Credits)
to Costs

and
Expenses
  (Charges)
Credits to
Reserves(1)
  Balance at
End of
Period
   (Dollars in thousands)

Allowances for possible losses on notes and accounts receivable:

      

Year ended December 31, 2007

  $751  $1,879  $5,516  $8,146

Year ended December 31, 2006

  $1,499  $(61) $(687) $751

Year ended December 31, 2005

  $1,590  $137  $(228) $1,499

 





(1)Includes effect of changes in foreign currency exchange rates and balances acquired in the acquisition of DBT.
STYLE="margin-top:0px;margin-bottom:0px"> 


51








SIGNATURES

FACE="Times New Roman" SIZE="2">Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized.

 





















































BUCYRUS INTERNATIONAL, INC.  
(Registrant)  
By 

/s/ Craig R. Mackus

  July 10, 2008
 Craig R. Mackus  
 Chief Financial Officer and Secretary  

 


S-1








BUCYRUS INTERNATIONAL, INC.

ALIGN="center">EXHIBIT INDEX

TO

ALIGN="center">2007 ANNUAL REPORT ON FORM 10-K

 

































































Exhibit No.

  

Description

  2.1

  Share Purchase Agreement by and among RAG Coal International Aktiengesellschaft, DBT Holdings GmbH and Bucyrus International, Inc., dated December 16, 2006 (incorporated by reference
herein to Exhibit 10.1 to the Company’s Form 8-K filed December 21, 2006).

  2.2

  Forward Purchase Agreement by and among HMS Hamburg Trust GmbH, Bucyrus Holdings GmbH and RAG Coal International Aktiengesellschaft, dated December 16, 2006 (incorporated by reference
herein to Exhibit 10.2 to the Company’s Form 8-K filed December 21, 2006).

  2.3

  Shareholders’ Agreement by and between Bucyrus Holdings GmbH and HMS Hamburg Trust GmbH, dated December 16, 2006 (incorporated by reference herein to Exhibit 10.3 to the Company’s
Form 8-K filed December 21, 2006).

  2.4

  Third Addendum, dated February 18, 2008, to Share Purchase Agreement, dated December 16, 2006 by and among RAG Coal International GmbH, DBT Holdings GmbH and Bucyrus International, Inc.
(incorporated by reference herein to Exhibit 2.1 to the Company’s Form 8-K filed February 21, 2008).

  3.1

  Amended and Restated Certificate of Incorporation, effective May 3, 2006 (incorporated herein by reference to Exhibit 31 to the Company’s Form 8-K filed February 17,
2006).

  3.2

  Amended and Restated Bylaws, effective July 27, 2004 (incorporated herein by reference to Exhibit 3.21 to the Company’s Form 8-K filed February 17, 2006).

  3.3

  Certificate of Designations of the Board of Directors establishing the Series and fixing the Relative Rights and Preferences of Series A Junior Participating Preferred Stock (incorporated by
reference to Exhibit 3.1 to the Company’s Form 8-K filed August 6, 2007).

  4.1

  Amended and Restated Credit Agreement, dated as of May 25, 2007, by and among Bucyrus International, Inc. as Borrower, certain subsidiaries of Borrower, as foreign borrowers, the several
lenders from time to time parties thereto, Lehman Brothers, Inc. as Sole Lead Arranger and Sole Bookrunner, JPMorgan Chase Bank, N.A. and LaSalle Bank National Association as syndication Agents, National City Bank and M&I Marshall & Ilsley
Bank as documentation agents, Lehman Brothers Bankhaus AG as German agent and Lehman Commercial Paper Inc. as Administrative Agent (incorporated by reference to Exhibit 4.1 to the Company’s Form 8-K filed on August 6,
2007).

 


E-1







































































































  4.2

  First Amendment dated August 7, 2007 to Amended and Restated Credit Agreement, dated as of May 25, 2007 (incorporated by reference to Exhibit 4.1 to the Company’s Form 10-Q for
the quarter ended September 30, 2007).

  4.3

  Rights Agreement, dated as of August 2, 2007, between Bucyrus International, Inc. and LaSalle Bank National Association (incorporated by reference to Exhibit 4.1 to the Company’s
Registration Statement on Form 8-A dated as of August 6, 2007 (Commission File No. 0-50858)).

10.1 *

  Bucyrus International, Inc. Non-Employee Director Compensation. #

10.2*

  Bucyrus International, Inc. Amended and Restated Non-Employee Director Deferred Compensation Plan (incorporated herein by reference to Exhibit 10.5 to the Company’s Form 8-K, filed
October 24, 2006).

10.3*

  Bucyrus International, Inc. Supplemental Executive Retirement Plan effective October 20, 2006 (incorporated herein by reference to Exhibit 10.6 to the Company’s Form 8-K, filed October
24, 2006).

10.4*

  Bucyrus International, Inc. Executive Deferred Compensation Plan effective January 1, 2007 (incorporated herein by reference to Exhibit 10.7 to the Company’s Form 8-K, filed October
24, 2006).

10.5*

  Bucyrus International, Inc. Amended and Restated 2004 Equity Incentive Plan effective October 18, 2006 (incorporated herein by reference to Exhibit 10.8 to Company’s Form 8-K, filed
October 24, 2006).

10.6*

  Form of Performance Share Award Agreement under Amended and Restated 2004 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.10 to the Company’s Form 8-K, filed
October 24, 2006).

10.7*

  Form of Stock Appreciation Rights Agreement under Amended and Restated 2004 Equity Incentive Plan (incorporated herein by reference to Exhibit 10.11 to the Company’s Form 8-K, filed
October 24, 2006).

10.8*

  Bucyrus International, Inc. Omnibus Incentive Plan 2007 (incorporated by reference to Appendix A to the Company’s definitive proxy statement on Schedule 14A for the Bucyrus
International, Inc. Annual Meeting of Stockholders held April 25, 2007).

10.9*

  Omnibus Incentive Plan 2007, as amended August 2, 2007 (incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended September 30, 2007).

10.10*

  Form of 2007 Stock Appreciation Rights Agreement under Amended and Restated Omnibus Incentive Plan 2007 (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed
February 22, 2007).

10.11*

  Form of 2007 Restricted Share Award Agreement under Amended and Restated Omnibus Incentive Plan 2007 (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed on
February 22, 2007).

 


E-2














































































































10.12*

  Bucyrus International, Inc. Non-Employee Directors Stock Fee Guidelines under Omnibus Incentive Plan 2007 effective January 1, 2008. #

10.13*

  Amended and Restated Letter Agreement between the Company and Timothy W. Sullivan dated July 27, 2004 (incorporated herein by reference to Exhibit 10.21 to the Company’s Form 10-Q for
the quarter ended June 30, 2004).

10.14*

  Amendment dated February 15, 2007 to Letter Agreement, dated July 27, 2004, by and between the Company and Timothy W. Sullivan (incorporated herein by reference to Exhibit 10.6 to the
Company’s Form 8-K filed on February 22, 2007).

10.15*

  Amendment No. 2 dated December 31, 2007 to Letter Agreement, dated July 27, 2004, by and between the Company and Timothy W. Sullivan. #

10.16*

  Key Executive Employment and Severance Agreement dated January 1, 2008, by and between the Company and Timothy W. Sullivan. #

10.17*

  Employment Agreement between the Company and Craig R. Mackus, dated as of May 21, 1997 (incorporated by reference herein to Exhibit 10.17 to the Company’s Form 10-Q for the quarter ended
June 30, 1997).

10.18*

  Amendment dated February 15, 2007 to Employment Agreement, dated May 21, 1997, by and between the Company and Craig R. Mackus (incorporated herein by reference to Exhibit 10.7 to the
Company’s Form 8-K filed on February 22, 2007).

10.19*

  Amendment No. 2 dated December 14, 2007 to Employment Agreement, dated May 21, 1997, by and between the Company and Craig R. Mackus. #

10.20*

  Key Executive Employment and Severance Agreement dated January 1, 2008, by and between the Company and Craig R. Mackus. #

10.21*

  Employment offer letter, dated August 8, 2007, from the Company to William S. Tate (incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed on August 14, 2007).

10.22*

  Noncompetition, Confidentiality and Intellectual Property Agreement of William S. Tate dated August 8, 2007 (incorporated herein by reference to Exhibit 10.3 to the Company’s Form 8-K
filed on August 14, 2007).

10.23*

  Amendment No. 1 dated December 31, 2007 to Letter Agreement dated August 8, 2007, by and between the Company and William S. Tate. #

10.24*

  Employment offer letter, dated August 8, 2007, from the Company to Luis de Leon (incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed on August 14,
2007).

10.25*

  Noncompetition, Confidentiality and Intellectual Property Agreement of Luis de Leon dated August 8, 2007 (incorporated herein by reference to Exhibit 10.4 to the Company’s Form 8-K filed
on August 14, 2007).

 


E-3


















































































10.26*

  Key Executive Employment and Severance Agreement dated January 1, 2008, by and between the Company and Kenneth W. Krueger. #

10.27*

  Key Executive Employment and Severance Agreement dated January 1, 2008, by and between the Company and John F. Bosbous. #

10.28

  Agreement to Purchase and Sell Industrial Property between Registrant and InSite Real Estate Development, L.L.C., dated October 25, 2001 (incorporated by reference herein to Exhibit 10.18 to
Registrant’s Form 10-K for year ended December 31, 2001).

10.29

  Industrial Lease Agreement between Registrant and InSite South Milwaukee, L.L.C., dated January 4, 2002 (incorporated by reference herein to Exhibit 10.19 to Registrant’s Form 10-K for
year ended December 31, 2001).

13

  Portions of the 2007 Annual Report to Stockholders. #

21

  Subsidiaries of Registrant. #

23

  Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.

31.1

  Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act and Rules 13a-14(a)/15d-14(a).

31.2

  Certification of Chief Financial Officer and Secretary pursuant to Section 302 of the Sarbanes-Oxley Act and Rules 13a-14(a)/15d-14(a).

32

  Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 





*Management contract or compensatory plan or arrangement.




#Previously filed with the Form 10-K as originally filed on February 29, 2008.

SIZE="1"> 


E-4







EX-23
2
dex23.htm
CONSENT OF DELOITTE & TOUCHE LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.


Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.



Exhibit 23

FACE="Times New Roman" SIZE="2">CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in
Registration Statement Nos. 333-119273, 333-135558, and 333-135555 of our report dated February 28, 2008 (which report expresses an unqualified opinion and includes an explanatory paragraph relating to the adoption of Statement of Financial
Accounting Standards No. 123 (revised 2004), “Shared-Based Payment” and FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109”) relating to the
financial statements and financial statement schedules of Bucyrus International, Inc., and the effectiveness of Bucyrus International, Inc.’s internal control over financial reporting appearing in and incorporated by reference in this Annual
Report on Form 10-K of Bucyrus International, Inc. for the year ended December 31, 2007.

 














/s/ Deloitte & Touche LLP
Milwaukee, Wisconsin
February 28, 2008





EX-31.1
3
dex311.htm
SECTION 302 CEO CERTIFICATION


Section 302 CEO Certification



Exhibit 31.1

FACE="Times New Roman" SIZE="2">CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Timothy W. Sullivan, certify that:

STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 





1.I have reviewed this Amendment No. 2 to the Annual Report on Form 10-K/A (the “Report”) of Bucyrus International, Inc.;
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 





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 the 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 registration 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)) for the registrant and we 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;
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 






 (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;
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 






 (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 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: July 10, 2008 
 

/s/ Timothy W. Sullivan

 Timothy W. Sullivan
 Chief Executive Officer





EX-31.2
4
dex312.htm
SECTION 302 CFO CERTIFICATION


Section 302 CFO Certification



Exhibit 31.2

FACE="Times New Roman" SIZE="2">CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Craig R. Mackus, certify that:

STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 





1.I have reviewed this Amendment No. 2 to the Annual Report on Form 10-K/A (the “Report”) of Bucyrus International, Inc.;
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 





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 the 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 registration 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)) for the registrant and we 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;
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 






 (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;
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 






 (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 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: July 10, 2008 
 

/s/ Craig R. Mackus

 Craig R. Mackus
 Chief Financial Officer and Secretary





EX-32
5
dex32.htm
SECTION 906 CEO AND CFO CERTIFICATION


Section 906 CEO and CFO Certification



Exhibit 32

FACE="Times New Roman" SIZE="2">CERTIFICATION OF CEO AND CFO PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY

ACT OF 2002

In connection with
Amendment No. 2 to the Annual Report of Bucyrus International, Inc. (the “Company”) on Form 10-K/A for the period ended December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the
“Report”), Timothy W. Sullivan, as President and Chief Executive Officer of the Company, and Craig R. Mackus, Chief Financial Officer and Secretary of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

 






 (1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px"> 






 (2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 
























/s/ Timothy W. Sullivan

Timothy W. Sullivan
President and Chief Executive Officer
July 10, 2008

/s/ Craig R. Mackus

Craig R. Mackus
Chief Financial Officer and Secretary
July 10, 2008

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall
not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.



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