Forward-Looking Statements

The following discussion and analysis and information contained elsewhere in this report contain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by the use of predictive, future tense or forward-looking terminology, such as "believes," "anticipates," "expects," "estimates," "intends," "may," "will" or similar terms. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may differ materially from those contained in the forward-looking statements as a result of various factors, some of which are unknown. The factors that could cause our actual results to differ materially from those anticipated in such forward-looking statements and could adversely affect our actual results of operations and financial condition include, without limitation:

• the cyclical nature of the sale of original equipment due to fluctuations in market prices for coal, copper, oil, iron ore and other minerals, changes in general economic conditions, changes in interest rates, changes in customers' replacement or repair cycles, consolidation in the mining industry and competitive pressures;

• changes in global financial markets and global economic conditions;

• our customers deferring, delaying or canceling capital investments due to volatility and tightening of credit markets, unprecedented financial market conditions and a global recession;

• disruption of our plant operations due to equipment failures, natural disasters or other reasons;

• our ability to attract and retain skilled labor;

• our production capacity;

• our ability to purchase component parts or raw materials from key suppliers at acceptable prices and/or on the required time schedule;

• our dependence on the commodity price of coal and other conditions in the coal market;

• our reliance on significant customers;

• the loss of key customers or key members of management;

• the risks and uncertainties of doing business in foreign countries, including emerging markets, and foreign currency risks;

• the highly competitive nature of the mining industry;

• our ability to continue to offer products containing innovative technology that meets the needs of our customers;

• costs and risks associated with changing tax legislation, environmental laws and all other regulatory compliance;

• product liability, environmental and other potential litigation;

• work stoppages at our company, our customers, our suppliers or providers of transportation;

• our ability to satisfy underfunded pension and postretirement obligations;

• our ability to protect intellectual property; and

• the availability of operating cash to service our indebtedness

The foregoing factors do not constitute an exhaustive list of factors that could cause actual results to differ materially from those anticipated in forward-looking statements. This should be read in conjunction with other cautionary statements and risk factors included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 2, 2009. All forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Preamble

All references to the "Company," "us," "we" and "our" in the following discussion and analysis means, unless the context indicates otherwise, Bucyrus International, Inc. together with its consolidated subsidiaries.

Business

We are a leading designer and manufacturer of high productivity mining equipment for the extraction of coal, copper, oil sands, iron ore and other minerals in major mining centers throughout the world. In addition to the manufacture of original equipment, we also provide the aftermarket replacement parts and service for this equipment. All of our products and services are marketed under the Bucyrus name. We have manufacturing facilities in Australia, China, Germany and the United States and service and sales centers in Australia, Brazil, Canada, Chile, China, the Czech Republic, England, Germany, India, Mexico, Poland, Peru, Russia, South Africa and the United States. The largest markets for our original equipment and aftermarket parts and service have historically been in Australia, Canada, China, Germany, India, South Africa, South America and the United States. In the future, we expect that the United States, Australia, Brazil, Canada, China, India and Russia will be increasingly important markets for our surface mining equipment and that the United States, China, Russia, Eastern Europe and India will be increasingly important markets for our underground mining equipment.

A substantial portion of our sales and operating earnings is attributable to our operations located outside the United States. We generally sell our surface mining original equipment, including that sold directly to foreign customers, and most of our aftermarket parts in United States dollars. Our underground mining original equipment is generally sold in either United States dollars or euros. A portion of our aftermarket parts sales are also denominated in the local currencies of Australia, Brazil, Canada, South Africa and the United Kingdom. Aftermarket services are paid for primarily in local currency, which is naturally hedged by our payment of local labor in local currency.

In our surface mining segment, overall quoting activity for our original equipment in the third quarter of 2009 increased slightly compared to the second quarter of 2009. We believe the increase in quoting activity primarily related to the strengthening of the oil sands and copper markets. We currently expect quoting activity for our surface mining original equipment to increase during the fourth quarter of 2009 compared with the third quarter of 2009.

We currently expect our surface mining aftermarket parts and service quoting activity during the fourth quarter of 2009 to remain generally consistent with the first nine months of 2009.

In our underground mining segment, overall quoting activity for our original equipment in the third quarter of 2009 was generally higher than the first and second quarter 2009 levels. We believe this increase was primarily due to improving coal prices and improving access to capital for our customers. We currently expect quoting activity for our underground mining original equipment during the fourth quarter of 2009 to remain consistent with third quarter 2009 levels.

Quoting activity for our underground mining aftermarket parts and service for the third quarter of 2009 was consistent with the second quarter of 2009. We currently expect our underground mining aftermarket parts and service quoting activity during the fourth quarter of 2009 to remain generally consistent with the third quarter of 2009.

Backlog

Our backlog level, which represents unfilled orders for our products and services, allows us to more accurately forecast our upcoming sales and plan our production accordingly. Our backlog also provides us with a relatively predictive level of expected sales and cash flows for the next 12 months. Due to the high cost of some of our original equipment, our backlog is subject to volatility, particularly over relatively short periods. A portion of our surface mining backlog is related to multi-year contracts that will generate revenue in future years.

During the quarter ended September 30, 2009 there were no cancellations of previously placed surface mining and underground mining original equipment orders. Approximately $28 million of orders in our underground mining original equipment backlog at December 31, 2008 were cancelled during the nine months ended September 30, 2009. The cancellations were primarily with customers in Central Appalachia of the United States. There were no refundable or nonrefundable down payments involved with any of these cancellations. There were no cancellations of our surface mining original equipment orders during the nine months ended September 30, 2009.

We have transferred certain original equipment orders previously scheduled to ship in 2009 to our 2010 shipping schedule due to the delay of capital equipment expenditures by certain of our large multinational customers. Through September 30, 2009, we have transferred approximately $200 million of planned 2009 original equipment shipments to 2010, primarily at the request of certain of our customers. We do not currently anticipate transferring shipment of additional 2009 original equipment orders to 2010, and we believe that increased sales of our aftermarket parts and service in 2009 will offset the decline in original equipment sales. We do not expect this transfer of orders to have a material adverse effect on our cash levels or liquidity

in 2009. Inventory levels for the fourth quarter of 2009 are not expected to increase because of this transfer of orders since most raw materials have already been received or have been delayed to match the 2010 shipping schedule.

Our backlog at September 30, 2009 and December 31, 2008, as well as the portion of our backlog which is expected to be recognized within 12 months of these dates, was as follows:

                            September 30, 2009     December 31, 2008    % Change
                                          (Dollars in thousands)
     Surface Mining:
     Total                 $          1,127,219   $         1,367,242      (17.6 )%
     Next 12 months        $            731,481   $           906,884      (19.3 )%
     Underground Mining:
     Total                 $            809,465   $         1,135,212      (28.7 )%
     Next 12 months        $            571,620   $           806,074      (29.1 )%
     Total:
     Total                 $          1,936,684   $         2,502,454      (22.6 )%
     Next 12 months        $          1,303,101   $         1,712,958      (23.9 )%


New Orders

New orders were as follows:

                                     Quarter Ended September 30,             Nine Months Ended September 30,
                                     2009        2008      % Change           2009          2008       % Change
                                                             (Dollars in thousands)

Surface Mining:
Original equipment                $  107,495   $ 202,341      (46.9 )%    $    235,668   $   657,521      (64.2 )%
Aftermarket parts and service        186,023     159,191       16.9 %          504,188       778,980      (35.3 )%

                                     293,518     361,532      (18.8 )%         739,856     1,436,501      (48.5 )%


Underground Mining:
Original equipment                   207,931     467,092      (55.5 )%         329,474       964,207      (65.8 )%
Aftermarket parts and service        126,132     151,086      (16.5 )%         370,847       448,541      (17.3 )%

                                     334,063     618,178      (46.0 )%         700,321     1,412,748      (50.4 )%


Total:
Original equipment                   315,426     669,433      (52.9 )%         565,142     1,621,728      (65.2 )%
Aftermarket parts and service        312,155     310,277        0.6 %          875,035     1,227,521      (28.7 )%

                                  $  627,581   $ 979,710      (35.9 )%    $  1,440,177   $ 2,849,249      (49.5 )%

The decrease in surface mining original equipment new orders for the quarter and nine months ended September 30, 2009 compared to the same periods for 2008 was primarily due to a decline in electric mining shovel and blasthole drill new orders. Capital spending by our customers continues to be negatively impacted by the effect of current global economic conditions on commodities and credit markets.

The increase in surface mining aftermarket parts and service new orders for the quarter ended September 30, 2009 compared to the same period for 2008 was primarily in Australia due to current market conditions. Surface mining aftermarket parts and service new orders for nine months ended September 30, 2009 have declined in most markets compared to the same period for 2008 as a result of current global economic conditions; however, new orders have increased in China and Southern Africa. The increase in China was primarily the result of increased demand for coal resulting in higher Bucyrus equipment utilization rates, which required increased maintenance. The increase in Southern Africa was primarily the result of lower than normal new orders from some of our larger customers during the nine months ended September 30, 2008 compared to the same period for 2009. New orders for our surface mining aftermarket parts and service increased approximately 8% in the third quarter of 2009 compared to the second quarter of 2009. Included in surface mining aftermarket parts and service new orders for the nine months ended September 30, 2009 was $23.4 million related to multi-year contracts that will generate revenue in future years, compared to $278.3 million in the first nine months of 2008. Multi-year contracts vary in size and are not typically received on a regular basis.

Total surface mining new orders for the nine months ended September 30, 2009 were negatively impacted by approximately $26 million due to the effect of the stronger U.S. dollar on orders denominated in foreign currencies compared to the same period in 2008.

The decrease in underground mining original equipment new orders for the quarter ended September 30, 2009 compared to the same period for 2008 was primarily due to the timing of larger longwall new orders with customers in the United States, Germany and China during the third quarter of 2008 and reduced new orders in all product lines in 2009 as a result of current global economic conditions. The decrease in underground mining original equipment new orders for the nine months ended September 30, 2009 compared to the same period for 2008 was primarily due to the sale of five complete longwall systems to a customer in the Czech Republic in the first quarter of 2008 and the sale of multiple complete longwall systems to customers in the United States in 2008. Longwall and room and pillar new orders have been negatively impacted in 2009 as a result of current global economic conditions causing delays in capital spending by our customers and reduced coal prices.

The decrease in underground mining aftermarket parts and service new orders for the third quarter of 2009 compared to the same period for 2008 was primarily in the United States and Germany. The decrease in aftermarket new orders in the United States coincides with the decreased new orders for longwall systems in 2009 as discussed above, as United States customers tend to order aftermarket packages at the time they place a longwall system order. The decrease in aftermarket new orders in Germany was due to reduced coal production by our customers in 2009. The decrease in underground mining aftermarket parts and service new orders for the nine months ended September 30, 2009 compared to the same period for 2008 was in all markets, primarily a result of current global economic conditions causing customers to postpone longwall face extension projects that require large amounts of capital.

Total underground mining new orders for the nine months ended September 30, 2009 were negatively impacted by approximately $48 million due to the stronger U.S. dollar on orders denominated in foreign currencies compared to the same period in 2008.

Results of Operations

    Quarter and Nine Months Ended September 30, 2009 Compared to Quarter and

                      Nine Months Ended September 30, 2008



                                                          Quarter Ended September 30,
                                               2009                            2008                    %
                                       Amount       % of Sales         Amount       % of Sales       Change
                                                             (Dollars in thousands)
Sales                                $   675,767            -        $   646,002            -           4.6 %
Gross profit                         $   223,843          33.1 %     $   182,331          28.2 %       22.8 %
Selling, general and
administrative Expenses              $    71,405          10.6 %     $    66,285          10.3 %        7.7 %
Operating earnings                   $   136,566          20.2 %     $   102,953          15.9 %       32.6 %
Net earnings                         $    92,067          13.6 %     $    64,167           9.9 %       43.5 %

                                                        Nine Months Ended September 30,
                                               2009                            2008                    %
                                       Amount       % of Sales         Amount       % of Sales       Change
                                                             (Dollars in thousands)
Sales                                $ 2,005,947            -        $ 1,783,991            -          12.4 %
Gross profit                         $   599,290          29.9 %     $   498,012          27.9 %       20.3 %
Selling, general and
administrative Expenses              $   195,473           9.7 %     $   185,149          10.4 %        5.6 %
Operating earnings                   $   359,764          17.9 %     $   270,229          15.1 %       33.1 %
Net earnings                         $   231,248          11.5 %     $   167,565           9.4 %       38.0 %

Sales

Sales consisted of the following:



                                         Quarter Ended September 30,             Nine Months Ended September 30,
                                                                   %                                           %
                                         2009          2008      Change           2009            2008       Change
                                                                 (Dollars in thousands)
Surface Mining:
Original equipment                    $   119,800    $ 155,554    (23.0 )%    $     417,103    $   437,631     (4.7 )%
Aftermarket parts and service             193,093      181,594      6.3 %           562,835        485,354     16.0 %

                                          312,893      337,148     (7.2 )%          979,938        922,985      6.2 %

Underground Mining:
Original equipment                        215,758      186,037     16.0 %           613,348        512,653     19.6 %
Aftermarket parts and service             147,116      122,817     19.8 %           412,661        348,353     18.5 %

                                          362,874      308,854     17.5 %         1,026,009        861,006     19.2 %

Total:
Original equipment                        335,558      341,591     (1.8 )%        1,030,451        950,284      8.4 %
Aftermarket parts and service             340,209      304,411     11.8 %           975,496        833,707     17.0 %

                                      $   675,767    $ 646,002      4.6 %     $   2,005,947    $ 1,783,991     12.4 %

The decrease in surface mining original equipment sales for the quarter and nine months ended September 30, 2009 compared to the same periods for 2008 was primarily due to decreased electric mining shovel sales, which was partially offset by increased percentage of completion revenue recognized from the manufacture and assembly of walking draglines in Australia and Canada.

The increase in surface mining aftermarket parts and service sales for the quarter ended September 30, 2009 compared to the same period for 2008 was primarily in the Chilean market with moderate increases in the Canadian and Chinese markets, offset by a decline in the Australian and Peruvian markets. The increase in surface mining aftermarket parts and service for the nine months ended September 30, 2009 compared to the same period for 2008 was primarily in the Chilean, United States, Chinese and Australian markets with a moderate increase in the Canadian market, offset by a moderate decline in the Peruvian market. The largest increase for the quarter and nine months ended September 30, 2009 compared to the same periods for 2008 was in the Chilean market and was primarily the result of improved copper prices and increased machine utilization by some of our customers in this region. The increase in the United States market for the nine months ended September 30, 2009 compared to the same period for 2008 was primarily driven by increased capital spending by customers in the southwest region. The increase in the Chinese market for the quarter and nine months ended September 30, 2009 compared to the same periods for 2008 was primarily due to increased part sales for original equipment sold to this market in recent prior periods. The decrease in the Australian market for the quarter ended September 30, 2009 compared to the same period for 2008 was due to current market conditions, and the increase in the Australian market for the nine months ended September 30, 2009 compared to the same period for 2008 was due to two large dragline

projects. The increase in the Canadian market for the quarter ended September 30, 2009 compared to the same period for 2008 was due to large scheduled maintenance projects on electric mining shovels at several large Canadian customers and the increase in this market for the nine months ended September 30, 2009 compared to the same period for 2008 was primarily the result of backlog reductions related to prior period new orders. The decrease in the Peruvian market for the quarter and nine months ended September 30, 2009 compared to the same periods for 2008 was the result of the expiration of a multi-year parts and service contract during 2008.

Total surface mining sales for the quarter and nine months ended September 30, 2009 were negatively impacted by approximately $6.2 million and $34.9 million, respectively, due to the effect of the stronger U.S. dollar on sales denominated in foreign currencies compared to the same periods for 2008.

The increase in underground mining original equipment sales for the quarter and nine months ended September 30, 2009 compared to the same periods for 2008 was the result of increases in all product lines.

The increase in underground mining aftermarket parts and service sales for the quarter and nine months ended September 30, 2009 compared to the same periods for 2008 was primarily due to increased longwall replacement projects in the United States market as well as increased sales in the Czech Republic market as the result of an acquisition in the fourth quarter of 2008, offset by a decline in the Southern African market due to a large longwall extension order in 2008. Many of the longwall replacement projects in the United States were ordered in 2008 as a result of mine conditions making it more economical to extend the lives of existing longwall systems instead of buying new systems. Sales for the third quarter of 2009 also increased in the Australian market as a result of large rebuild orders from customers to extend the lives of their existing Bucyrus mining equipment.

Total underground mining sales for the quarter and nine months ended September 30, 2009 were negatively impacted by approximately $11.6 million and $65.9 million, respectively, due to the effect of the stronger U.S. dollar on sales denominated in foreign currencies compared to the same periods for 2008.

Gross Profit

Gross profit and gross margin were as follows:



                    Quarter Ended September 30,                Nine Months Ended September 30,
                 2009           2008         % Change         2009           2008         % Change
                                             (Dollars in thousands)
Gross profit   $ 223,843      $ 182,331          22.8 %    $  599,290      $ 498,012          20.3 %
Gross margin        33.1 %         28.2 %         N/A            29.9 %         27.9 %         N/A

Gross profit was affected by purchase accounting adjustments as a result of the acquisition of DBT GmbH ("DBT") in 2007 as follows:

                                                       Quarter Ended             Nine Months Ended
                                                       September 30,               September 30,
                                                     2009         2008          2009           2008
                                                                 (Dollars in thousands)
(Increase) decrease due to purchase accounting
adjustments                                         $ (483 )     $ (629 )     $ (1,432 )     $ 11,262
Gross margin increase (reduction)                       -           0.1 %          0.1 %         (0.6 )%

The increase in gross profit for the quarter ended September 30, 2009 compared to the same period for 2008 was primarily due to the mix of original equipment sales in both of our surface and underground mining segments and increased underground mining segment sales. The increase in year-to-date 2009 gross profit was primarily due to increased sales in both our surface and underground mining segments and the mix of original equipment sales in our surface mining segment. Excluding the effect of the DBT purchase accounting adjustments, gross profit was 33.0% of sales for the third quarter of 2009 compared to 28.1% of sales for the third quarter of 2008 and 29.8% of sales for the nine months ended September 30, 2009 compared to 28.5% of sales for the nine months ended September 30, 2008. The increase in gross margin for the quarter and nine months ended September 30, 2009 compared to the same periods last year was primarily due to the mix of margins on original equipment orders, raw material cost reductions, improved efficiencies in our manufacturing operations, and moving some subcontract work back into our facilities.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were as follows:



. . .