FY06Q4Slides

Slide1: 

Fiscal 2006 4th Quarter Earnings Call

Forward-Looking Statements & Non-GAAP Measures: 

All statements in this information other than historical facts are forward-looking statements which involve risks and uncertainties, and which are subject to change at any time. Such statements are based on our current expectations. We undertake no obligation to update such statements to reflect new information, events or otherwise. In addition to the assumptions and other factors referred to in this information, cautionary factors set forth in our public filings with the Securities and Exchange Commission, among others, could cause actual results to differ materially from those currently contemplated. Non-GAAP Measures: The company from time to time refers to various non-GAAP financial measures. We believe that this information is useful to understanding the operating results and ongoing performance of our underlying businesses. See our public filings with the SEC or the investor relations section of our website www.joyglobal.com for reconciliations of material non-GAAP financial measures to their related GAAP measures. Forward-Looking Statements & Non-GAAP Measures

Slide3: 

Solid Growth in Fiscal 2006 1. Note 1. Excluding reversal effects of U.S. Federal Tax Valuation Reserve, or $0.88 per share Note 2. EBITDA, less cash taxes, CAPEX, interest expense and changes in non-cash working capital 2.

Slide4: 

Cycle Continuing to Develop Q4 new orders very strong, but “lumpiness” will continue $836 million of total orders in Q4 Aftermarket remains strong with 15% increase in bookings – 14th consecutive quarter of double-digit growth. Million $

Joy Mining Booking TrendsBy Geography: 

Joy Mining Booking Trends By Geography Current softness in U.S. underground coal more than offset by new order growth in other markets

Slide6: 

Surface Commodity Diversification Strength 4th Qtr. Unit Shovel Orders Fiscal 2006 Unit Shovel Orders Near-term softness in U.S. coal markets having no noticeable effect on strong original equipment order rates at P&H Mining Equipment!

Slide7: 

Our aftermarket business has grown rapidly again in fiscal 2006, increasing by more than 20% for the second consecutive year! Aftermarket Growth Continues Sales in Million $ AM Sales %

Representative Effects of Slowdown in U.S. Coal: 

International 50% U.S. 50% Aftermarket 2/3 O.E. 1/3 Representative Effects of Slowdown in U.S. Coal Revenue Mix Geographic Mix % Contribution to Revenues P&H Mining 40% Joy Mining 60% U.S. Underground Coal = 30% JOYG Revenues U.S. Underground O.E.= 10% JOYG Revenues Overall, U.S. underground original equipment business represents only 10% of “normalized” JOYG revenues

Emerging Markets Growth Opportunity: 

Joy Global’s Emerging Market Sales Emerging Markets Growth Opportunity % of Total 4% 9% 10% 10% 15% 13% Emerging markets sales totaled $307 mm in fiscal 2006, or 13% of JOYG total revenues. Continue to expect $500MM in annual revenues from China alone by fiscal 2010 Expansion of Baotou facility, development of Tianjin, China facility and Polish service center underway - Russian service center being upgraded Foundation Customers Build Aftermarket Revenues Develop Local Resources Emerging Markets Strategy

Capacity Continues to Increase: 

Capacity Continues to Increase Overall OE production levels will continue to increase (Milwaukee & Tianjin) Commitment to high level of aftermarket support continues to limit growth in OE shipping levels De-bottlenecking approach to capacity expansion minimizes roofline additions and fixed cost base Next 12 month JOYG revenue growth forecasted at 13-25% overall Revenue Per Square Foot Thousand Square Feet

EBIT Performance Marches Higher and Incremental Profitability Remains Strong: 

EBIT Performance Marches Higher and Incremental Profitability Remains Strong LTM EBIT % Quarterly Incremental Profitability EBIT performance is in target range. Outstanding incremental performance again in Q4. Fiscal 2007 results anticipated to be at low end of incremental target range with more challenging comparables, acquisition related non-cash charges and revenue mix contributing to this anticipation. Target Range Target Range

Slide12: 

Strong ROIC and W.C. Velocity Performance ROIC W.C. Velocity Although working capital velocity performance slipped slightly in fiscal 2006, overall strength in this metric contributes to cash flow generation which contributes to high ROIC performance due to commitment of returning excess cash to shareholders 1. Note 1. Excluding reversal effects of U.S. Federal Tax Valuation Reserves

Maintaining Attractive Free Cash Flow: 

Maintaining Attractive Free Cash Flow Current 12-month guidance continues to provide for free cash flow in the range of 10-15% of the increased revenue forecast – key remains the control of working capital!

Slide14: 

Return of Cash to Shareholders Increased Dramatically in FY06 Quarterly Dividends Quarterly Share Repurchase - FY 2006 $/sh. Million $ Note: As of December 15th, $210 million additional buybacks in FY07Q1

Slide15: 

Reduced Outstanding Shares and Equity Grants Actual O/S Shares Equity Grants Million Shares Million Shares Creditor’s Committee allocated 10% equity pool (11.25M shares) which were distributed by FY03 Each annual equity grant in last 3 years approximating 1% of outstanding Less than 113 million shares outstanding on December 15th

Summary of Forward Guidance: 

Notes: Uncertainly of effects from near-term softness in U.S. coal influencing overall revenue guidance range Stamler impact of 5% percentage points of revenue growth, and $11M amortization costs Strong operating performance continues to drive EBIT sales percent in the “high teens” targeted range EPS affected by higher interest costs offset by lower total outstanding shares Tax rate assumed in FY07 of 33% FY06 EPS excludes discreet tax credits Summary of Forward Guidance

Increased Q4 Earnings Guidance: 

Increased Q4 Earnings Guidance 14th straight quarter of increased guidance – specific issues considered this quarter in addition to normal guidance deliberations included; a) effects of near-term softness in U.S. coal versus continued strength in overall markets, b) Stamler adjustments and estimated effects, and c) forecasted effects of stock buyback program in fiscal 2007 A A – EPS excludes discrete tax adjustments

Slide18: 

Fiscal 2006 4th Quarter Earnings Call