UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  Form 10-Q  (Mark One)  |X|QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended June 30, 2005  OR  |_|TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the transition period from __________ to __________  Commission file number1-871  BUCYRUS INTERNATIONAL, INC. (Exact Name of Registrant as Specified in its Charter)   DELAWARE
    39-0188050(State
        or Other Jurisdiction ofIncorporation or Organization)
    (I.R.S.
        EmployerIdentification No.)  P. O. BOX 500 1100 MILWAUKEE AVENUE SOUTH MILWAUKEE, WISCONSIN 53172 (Address of Principal Executive Offices) (Zip Code)  (414) 768-4000 (Registrants Telephone Number, Including Area Code)       Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (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 [   ]  Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).   Yes [    ]   No [ X ]  Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.  Class
        Outstanding August 5, 2005  Class A Common Stock, $.01 par value
        20,445,405        BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES  INDEX Page No.PART I.
        FINANCIAL INFORMATION:  Item 1 -
        Financial Statements (Unaudited)  Consolidated
        Condensed Statements of Operations -
        Quarters and six months ended June 30, 2005 and 2004
    
    4  Consolidated
        Condensed Statements ofComprehensive Income (Loss) - Quarters and sixmonths ended June 30, 2005 and 2004
    5  Consolidated
        Condensed Balance Sheets -June
        30, 2005 and December 31, 2004
    6-7  Consolidated
        Condensed Statements of Cash Flows -Six
        months ended June 30, 2005 and 2004
    8  Notes
        to Consolidated Condensed FinancialStatements
    9-15  Item
        2 -
    Managements
        Discussion and Analysis ofFinancial
        Condition and Results of Operations
    16-25  Item
        3 -
    Quantitative
        and Qualitative DisclosuresAbout
        Market Risk
    26  Item
        4 -
    Controls
        and Procedures
    27  Forward-Looking
        Statements
    28  PART II.
        OTHER INFORMATION:  Item
        1 -
    Legal
        Proceedings
    29  Item
        2 -
    Unregistered
        Sales of Equity Securitiesand
        Use of Proceeds
    29  Item
        3 -
    Defaults
        Upon Senior Securities
    29  Item
        4 -
    Submission
        of Matters to a Vote ofSecurity
        Holders
    29  Item
        5 -
    Other
        Information
    29  Item
        6 -
    Exhibits
    29  Signature
        Page
    30         PART I FINANCIAL INFORMATION  BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES ITEM 1 - FINANCIAL STATEMENTS CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in Thousands, Except Per Share Amounts)  Quarters Ended
      June 30,
    
    Six Months
      Ended June 30,2005
    
    2004
    
    2005
    
    2004Sales
    
    
    $
    140,037
    
    $
    116,967
    
    $
    245,558
    
    $
    214,095Cost of products
      sold
    
    
    
    109,043
    
    
    92,180
    
    
    185,538
    
    
    169,651Gross
      profit
    
    
    
    30,994
    
    
    24,787
    
    
    60,020
    
    
    44,444Selling,
      general andadministrative
      expenses
    
    
    
    12,141
    
    
    14,206
    
    
    24,446
    
    
    28,262Research
      and developmentexpenses
    
    
    
    1,460
    
    
    1,280
    
    
    2,810
    
    
    2,634Amortization
      of intangible
    
    
    
    450
    
    
    411
    
    
    903
    
    
    823assetsOperating
      earnings
    
    
    
    16,943
    
    
    8,890
    
    
    31,861
    
    
    12,725Interest
      expense
    
    
    
    1,110
    
    
    4,166
    
    
    2,362
    
    
    8,291Other expense
      - net
    
    
    
    92
    
    
    373
    
    
    115
    
    
    718Earnings
      before incometaxes
    
    
    
    15,741
    
    
    4,351
    
    
    29,384
    
    
    3,716Income tax
      expense
    
    
    
    5,517
    
    
    1,722
    
    
    10,035
    
    
    3,102Net earnings
    
    
    $
    10,224
    
    $
    2,629
    
    $
    19,349
    
    $
    614Net earnings
      per share data:Basic:Net
      earnings per share
    
    
    $
    .50
    
    $
    .22
    
    $
    .96
    
    $
    .05Weighted
      average shares
    
    
    
    20,293,990
    
    
    12,058,400
    
    
    20,181,674
    
    
    12,058,400Diluted:Net
      earnings per share
    
    
    $
    .49
    
    $
    .21
    
    $
    .93
    
    $
    .05Weighted
      average shares
    
    
    
    20,830,660
    
    
    12,687,687
    
    
    20,806,619
    
    
    12,716,552    See notes to consolidated condensed financial statements.  4        BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES ITEM 1 - FINANCIAL STATEMENTS CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Dollars in Thousands)  Quarters Ended
      June 30,
    
    Six Months
      Ended June 30,2005
    
    2004
    
    2005
    
    2004Net
      earnings
    
    
    $
    10,224
    
    $
    2,629
    
    $
    19,349
    
    $
    614Other comprehensive
      (loss)-Foreign
      currencytranslation
      adjustments
    
    
    
    781
    
    
    (3,048
    )
    
    (2,992
    )
    
    (4,043
    )Comprehensive
      income(loss)
    
    
    $
    11,005
    
    $
    (419
    )
    $
    16,357
    
    $
    (3,429
    )   See notes to consolidated condensed financial statements   5        BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES ITEM 1 - FINANCIAL STATEMENTS CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (Dollars in Thousands, Except Per Share Amounts)  June 30,
      2005
    
    December 31,
      2004ASSETSCURRENT ASSETS:Cash
      and cash equivalents
    
    
    $
    6,786
    
    $
    20,617Receivables
      - net
    
    
    
    106,484
    
    
    90,802Inventories
    
    
    
    147,485
    
    
    110,815Deferred
      income tax assets
    
    
    
    9,087
    
    
    9,607Prepaid
      expenses and othercurrent
      assets
    
    
    
    6,862
    
    
    7,205Total
      Current Assets
    
    
    
    276,704
    
    
    239,046OTHER ASSETS:Goodwill
    
    
    
    47,306
    
    
    47,306Intangible
      assets - net
    
    
    
    35,936
    
    
    36,935Deferred
      income tax assets
    
    
    
    5,386
    
    
    7,651Other
      assets
    
    
    
    8,364
    
    
    8,19196,992
    
    
    100,083PROPERTY,
      PLANT AND EQUIPMENT:Cost
    
    
    
    126,863
    
    
    120,724Less
      accumulated depreciation
    
    
    
    (71,460
    )
    
    (67,044
    )55,403
    
    
    53,680$
    429,099
    
    $
    392,809   6       BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES ITEM 1 - FINANCIAL STATEMENTS CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (Continued) (Dollars in Thousands, Except Per Share Amounts)  June 30,
      2005
    
    December 31,
      2004LIABILITIES
      AND COMMONSHAREHOLDERS
      INVESTMENTCURRENT LIABILITIES:Accounts
      payable and accrued expenses
    
    
    $
    87,195
    
    $
    59,446Liabilities
      to customers on uncompletedcontracts
      and warranties
    
    
    
    11,961
    
    
    8,221Income
      taxes
    
    
    
    1,786
    
    
    2,880Current
      maturities of long-term debt andother
      short-term obligations
    
    
    
    1,661
    
    
    6,342Total
      Current Liabilities
    
    
    
    102,603
    
    
    76,889LONG-TERM
      LIABILITIES:Postretirement
      benefits
    
    
    
    14,064
    
    
    13,700Pension
      and other
    
    
    
    36,505
    
    
    38,24250,569
    
    
    51,942LONG-TERM
      DEBT, less currentmaturities
    
    
    
    89,381
    
    
    96,910COMMON SHAREHOLDERSINVESTMENT:Common
      stock - par value $.01per
      share, authorized 41,000,000shares,
      issued 20,467,109 sharesand
      20,095,977 shares, respectively
    
    
    
    205
    
    
    201Additional
      paid-in capital
    
    
    
    295,274
    
    
    289,930Unearned
      restricted stock compensation
    
    
    
    (581
    )
    
    (671
    )Treasury
      stock - 72,400 shares, at cost
    
    
    
    (851
    )
    
    (851
    )Accumulated
      deficit
    
    
    
    (82,818
    )
    
    (99,850
    )Accumulated
      other comprehensive loss
    
    
    
    (24,683
    )
    
    (21,691
    )186,546
    
    
    167,068$
    429,099
    
    $
    392,809   See notes to consolidated condensed financial statements.  7        BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES ITEM 1 - FINANCIAL STATEMENTS CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in Thousands)  Six Months
      Ended June 30,2005
    
    2004Net
      Cash Provided By Operating Activities
    
    
    $
    5,733
    
    $
    21,609Cash Flows
      From Investing ActivitiesPurchases
      of property, plant and equipment
    
    
    
    (8,015
    )
    
    (2,346
    )Proceeds
      from sale of property, plant and equipment
    
    
    
    112
    
    
    57Other
    
    
    
    (86
    )
    
    15Net cash
      used in investing activities
    
    
    
    (7,989
    )
    
    (2,274
    )Cash Flows
      From Financing ActivitiesNet borrowings
      from (repayment of) revolving credit facility
    
    
    
    85,853
    
    
    (19,066
    )Repayment
      of senior secured term loan
    
    
    
    (98,750
    )
    
    Net increase
      in long-term debt and otherbank
      borrowings
    
    
    
    687
    
    
    711Payment of
      financing expenses
    
    
    
    (533
    )
    
    (208
    )Proceeds
      from issuance of common stock
    
    
    
    3,661
    
    
    Dividends
      paid
    
    
    
    (2,315
    )
    
    Net cash
      used in financing activities
    
    
    
    (11,397
    )
    
    (18,563
    )Effect of
      exchange rate changes on cash
    
    
    
    (178
    )
    
    (306
    )Net increase
      (decrease) in cash and cash equivalents
    
    
    
    (13,831
    )
    
    466Cash and
      cash equivalents at beginning of period
    
    
    
    20,617
    
    
    6,075Cash and
      cash equivalents at end of period
    
    
    $
    6,786
    
    $
    6,541Supplemental
      Disclosures of Cash Flow Information2005
    
    2004Cash paid
      during the period for:Interest
    
    
    $
    2,848
    
    $
    8,446Income
      taxes - net of refunds
    
    
    
    7,621
    
    
    4,623   See notes to consolidated condensed financial statements.  8         BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIESITEM 1 - FINANCIAL STATEMENTSNOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)  1.
        In the opinion of Bucyrus International, Inc. (the "Company"), the consolidated condensed financial statements contain all adjustments (consisting only of normal recurring accruals) necessary to present fairly the financial results for the interim periods.  Certain items are included in these statements based on estimates for the entire year.  Actual results in future periods may differ from the estimates.  The Companys operations are classified as one operating segment.  2.
        Certain notes and other information have been condensed or omitted from these interim consolidated condensed financial statements.  Therefore, these statements should be read in conjunction with the Companys 2004 Annual Report to Shareholders and Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 21, 2005.  3.
        On May 27, 2005, the Company entered into a new credit agreement which provides for a five-year $120.0 million revolving credit facility that may, at the Companys request and with the lenders' approval, be increased to $150.0 million.  Proceeds from this revolving credit facility were used to pay in full the previously outstanding senior secured term loan.  The Company had $85.9 million of borrowings under its new revolving credit facility as of June 30, 2005.  The new credit agreement provides that interest on borrowed amounts would initially be set at either the prime rate plus .25% or LIBOR plus 1.25%, with quarterly adjustments to interest rates beginning after six months.  Borrowings under the revolving credit facility are subject to a borrowing base formula based on the value of eligible receivables and inventory.  4.
        Inventories consist of the following:  June 30,
      2005
    
    December 31,
      2004(Dollars in
      Thousands)Raw
      materials and parts
    
    
    $
    31,193
    
    $
    21,583Work in process
    
    
    
    33,735
    
    
    7,633Finished
      products
            (primarily replacement parts)
    
    
    
    82,557
    
    
    81,599$
    147,485
    
    $
    110,815   9        5.
        The following is a reconciliation of the numerators and the denominators of the basic and diluted net earnings per share of common stock calculations for the quarters and six months ended June 30, 2005 and 2004:  Quarters Ended
      June 30,
    
    Six Months
      Ended June 30,2005
    
    2004
    
    2005
    
    2004(Dollars
      in Thousands, Except Per Share Amounts)Net
      earnings
    
    
    $
    10,224
    
    $
    2,629
    
    $
    19,349
    
    $
    614Weighted
      average shares outstanding
    
    
    
    20,293,990
    
    
    12,058,400
    
    
    20,181,674
    
    
    12,058,400Basic
      net earnings per share
    
    
    $
    .50
    
    $
    .22
    
    $
    .96
    
    $
    .05Weighted
      average shares outstanding
    
    
    
    20,293,990
    
    
    12,058,400
    
    
    20,181,674
    
    
    12,058,400Effect of
      dilutive stock options andrestricted
      stock
    
    
    
    536,670
    
    
    629,287
    
    
    624,945
    
    
    658,152Weighted
      average sharesoutstanding
      -diluted
    
    
    
    20,830,660
    
    
    12,687,687
    
    
    20,806,619
    
    
    12,716,552Diluted
      net earnings per share
    
    
    $
    .49
    
    $
    .21
    
    $
    .93
    
    $
    .05   10       6.
    
    The
        Company accounts 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). The following table illustrates the effect on
        net earnings and net earnings per share as if the fair value-based method
        provided by SFAS 123 had been applied for all outstanding and unvested
        awards in each period:  Quarters Ended
      June 30,
    
    Six Months
      Ended June 30,2005
    
    2004
    
    2005
    
    2004(Dollars
      in Thousands, Except Per Share Amounts)Reported
      net earnings
    
    $
    10,224
    
    $
    2,629
    
    $
    19,349
    
    $
    614Add: Stock-based
      employeecompensation
      expense recorded,net
      of related tax effects
    
    
    
    
    
    3,293
    
    
    
    
    
    7,441Deduct: Total
      stock-basedemployee
      compensation expensedetermined
      under fair value basedmethod,
      net of related tax effects
    
    
    
    
    
    (4
    )
    
    
    
    
    (8
    )Pro forma
      net earnings
    
    $
    10,224
    
    $
    5,918
    
    $
    19,349
    
    $
    8,047Net earnings
      per share of common stock:As
      reportedBasic
    
    $
    .50
    
    $
    .22
    
    $
    .96
    
    $
    .05Diluted
    
    
    .49
    
    
    .21
    
    
    .93
    
    
    .05Pro
      formaBasic
    
    
    .50
    
    
    .49
    
    
    .96
    
    
    .67Diluted
    
    
    .49
    
    
    .47
    
    
    .93
    
    
    .63  Options to purchase 195,102 and 370,020 shares of the Companys Class A common stock were exercised during the quarter and six months ended June 30, 2005, respectively.  11       7.
Intangible
assets consist of the following:   June 30, 2005
    
    December
      31, 2004Gross
      Carrying
      Amount
    
    Accumulated
      Amortization
    
    Gross
      Carrying
      Amount
    
    Accumulated
      Amortization(Dollars
      in Thousands)Amortized
      intangible assets:Engineering
      drawings
    
    
    $
    25,500
    
    $
    (9,906
    )
    $
    25,500
    
    $
    (9,268
    )Bill
      of material listings
    
    
    
    2,856
    
    
    (1,109
    )
    
    2,856
    
    
    (1,038
    )Software
    
    
    
    2,288
    
    
    (1,778
    )
    
    2,288
    
    
    (1,663
    )Other
    
    
    
    737
    
    
    (221
    )
    
    864
    
    
    (173
    )$
    31,381
    
    $
    (13,014
    )
    $
    31,508
    
    $
    (12,142
    )Unamortized
      intangible assets:Trademarks/Trade
      names
    
    
    $
    12,436
    
    
    
    
    $
    12,436Intangible
      pension asset
    
    
    
    5,133
    
    
    
    
    
    5,133$
    17,569
    
    
    
    
    $
    17,569  The aggregate intangible amortization expense for the quarter and six months ended June 30, 2005 was $.5 million and $.9 million, respectively.  The aggregate intangible amortization expense for the quarter and six months ended June 30, 2004 was $.4 million and $.8 million, respectively.  The estimated future amortization expense of intangible assets as of June 30, 2005 is as follows:  (Dollars in
      Thousands)2005
      (remaining six months)
    
    $
    8972006
    
    
    1,7942007
    
    
    1,7322008
    
    
    1,5652009
    
    
    1,4182010
    
    
    1,418Future
    
    
    9,543$
    18,367  8.
        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 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.   12       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.  Product Warranty  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 six months ended June 30, 2005 and 2004:  Six Months
      Ended June 30,2005
    
    2004(Dollars in
      Thousands)Balance
      at January 1
    
    
    $
    5,452
    
    $
    4,311Provision
    
    
    
    1,346
    
    
    1,835Charges
    
    
    
    (954
    )
    
    (978
    )Balance at
      June 30
    
    
    $
    5,844
    
    $
    5,168  Product Liability  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.  The Company has insurance covering most of these claims, subject to varying deductibles up to $3.0 million, 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  The Company has been named as a co-defendant in approximately 300 personal injury liability cases alleging damages due to exposure to asbestos and other substances, involving approximately 1,490 plaintiffs.  The cases are pending in courts in nine states.  In all of these cases, insurance carriers have accepted or are expected to accept defense.  These cases are in various pre-trial stages.  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.   13       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 a Company 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 are defending the claim, but have not conceded that the relevant policies cover the claim. At this time discovery is ongoing and it is not possible to evaluate the outcome of the claim nor the range of potential loss, if any.  A wholly-owned Australian subsidiary of the Company is a defendant in a suit pending in the Supreme Court of Queensland in Australia, brought on May 5, 2002, relating to a contractual claim.  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 for approximately AUS $3.6 million related to its claim that it is owed amounts for services rendered under the contract.  The Companys subsidiary has asserted counterclaims against the plaintiff in connection with certain aspects of the work performed.  This matter is anticipated to go to trial in late 2006.  The Company has established a reserve for its estimate of the resolution of this matter.  9.
        Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income," requires the reporting of comprehensive income (loss) in addition to net earnings from operations.  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 earnings.  The Company reports comprehensive income (loss) and accumulated other comprehensive income (loss) which includes net earnings, foreign currency translation adjustments and minimum pension liability adjustments.  Information on accumulated other comprehensive loss is as follows:  Cumulative
      
      Translation
      Adjustments
    
    Minimum 
      Pension 
      Liability 
      Adjustments
    
    Accumulated 
      Other 
      Comprehensive
      Loss(Dollars
      in Thousands)Balance
      at December 31, 2004
    $
    (5,307
    )
    $
    (16,384
    )
    $
    (21,691
    )Changes
       Six months ended
    
    (2,992
    )
    
    
    
    
    (2,992
    )June
      30, 2005Balance
      at June 30, 2005
    $
    (8,299
    )
    $
    (16,384
    )
    $
    (24,683
    )  10.
        The Company has several pension and retirement plans covering substantially all of its employees in the United States.  The Company also provides certain health care benefits to age 65 and life insurance benefits for certain eligible retired United States employees.  14       The components of net periodic pension cost consisted of the following:  Quarters
      Ended June 30,
    
    Six
      Months Ended June 30,2005
    
    2004
    2005
    
    2004(Dollars
      in Thousands)Service
      cost
    $
    552
    
    $
    444
    
    $
    1,104
    
    $
    887Interest
      cost
    
    1,310
    
    
    1,332
    
    
    2,620
    
    
    2,642Expected
      return on plan assets
    
    (1,116
    )
    
    (1,266
    )
    
    (2,232
    )
    
    (2,522
    )Amortization
      of prior service cost
    
    52
    
    
    51
    
    
    104
    
    
    102Amortization
      of actuarial loss
    
    402
    
    
    401
    
    
    804
    
    
    572Net cost
    $
    1,200
    
    $
    962
    
    $
    2,400
    
    $
    1,681  The components of other net periodic postretirement benefits cost (health care and life insurance) consisted of the following:  Quarters
      Ended June 30,
    
    Six
      Months Ended June 30,2005
    
    2004
    2005
    
    2004(Dollars
      in Thousands)Service
      cost
    $
    210
    
    $
    195
    
    $
    420
    
    $
    385Interest
      cost
    
    311
    
    
    307
    
    
    622
    
    
    571Amortization
      of prior service cost
    
    (60
    )
    
    (55
    )
    
    (120
    )
    
    (110
    )Amortization
      of actuarial loss
    
    91
    
    
    77
    
    
    182
    
    
    168Net cost
    $
    552
    
    $
    524
    
    $
    1,104
    
    $
    1,014  During the first six months of 2005, the Company contributed approximately $.9 million to its pension plans and $.6 million for the payment of benefits from its postretirement benefit plan.  The Company presently anticipates contributing an additional $1.9 million to its pension plans and $.6 million for the payment of benefits from its postretirement benefit plan during the remainder of 2005.  15        BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES ITEM 2 - MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS  Overview  Business  The Company designs, manufactures and markets large excavation machinery used for surface mining, and provides comprehensive aftermarket services, supplying replacement parts and offering maintenance and repair contracts and services for these machines.  The Company manufactures its original equipment (OEM) products and the majority of aftermarket parts at its facility in South Milwaukee, Wisconsin.  The Companys principal OEM products are draglines, electric mining shovels and rotary blasthole drills, which are used primarily by customers who mine copper, coal, oil sands and iron ore throughout the world.  In addition, the Company provides aftermarket services in mining centers throughout the world, including Argentina, Australia, Brazil, Canada, Chile, China, India, Peru, South Africa and the United States.  The largest markets for mining equipment have
historically been in Australia, Canada, South Africa, South America and the United States.  In the future, Canada, China and India are expected to be increasingly important markets.  The market for OEM machines is closely correlated with customer expectations of sustained strength in prices of surface mined commodities.  Growth in demand for these commodities is a function of, among other things, economic activity, population increases and continuing improvements in standards of living in many areas of the world.  In 2002, the market prices of many surface-mined commodities were generally weak.  In 2003 and 2004, market prices for copper, coal, iron ore and oil increased and have continued to be strong in 2005.  Factors that could support sustained demand for these key commodities in 2005 and future years include continued economic growth in China, India and the developing world and renewed economic strength in industrialized countries.  In the past quarter, inquiries for new machines have increased from prior quarters.  The highest interest has been in
the oil sands of Western Canada and copper mines in South America.  Inquiries from other areas of the world have also increased.  The Companys aftermarket parts and service operations, which have accounted for approximately 70% of sales over the past ten years, tend to be more consistent than OEM machine sales; however, recent pronounced strength in commodity markets has positively affected aftermarket sales.  The Companys complex machines are typically kept in continuous operation from 15 to 40 years, requiring regular maintenance and repair throughout their productive lives.  The size of the Companys installed base of surface mining equipment and its ability to provide on-time delivery of reliable parts and prompt service are important drivers of aftermarket sales.  Aftermarket orders and inquiries continue to increase as the existing installed fleet of machines operates at very high utilization levels due to the current demands for commodities.  The Company continues to forecast increased sales activity for both aftermarket parts sales and OEM machine sales relative to prior periods of weaker OEM sales. The Company maintains ongoing efforts to improve efficiency and contain costs and continually evaluates all opportunities for reductions to operating costs.  While the Company has recorded restructuring charges in recent years, it does not anticipate significant restructuring charges in the current year.  Recent strong order volume has caused the Company to hire new employees, and additional hiring is expected.  As sustained order strength continues, the Company is taking steps to increase its manufacturing capacity.  During the first quarter of 2005, the Company entered into an agreement to lease a facility to be used for expansion of the Companys manufacturing operations.   The Company anticipates that the
current commodity demand will continue for at least the next three to five years.  The Company is currently reviewing other expansion alternatives.   16       A substantial portion of the Companys sales and operating earnings is attributable to operations located outside the United States.  The Company generally sells its OEM machines, including those sold directly to foreign customers, and most of its aftermarket parts in United States dollars. A portion of the Companys aftermarket parts sales are also denominated in the local currencies of Australia, Brazil, Canada, Chile, South Africa and the United Kingdom.  Aftermarket services are paid for primarily in local currency which is naturally hedged by the Companys payment of local labor in local currency.  In the aggregate, approximately 70% of the Companys 2004 sales were priced in United States dollars.  Over the past three years, the Company increased gross profits by improving manufacturing overhead variances, achieving productivity gains and growing its high margin aftermarket parts and services business.  Following is a discussion of key measures which contributed to the Companys operating results.  Key Measures  On-Time Delivery and Lead Times  Due to the high fixed cost structure of the Companys customers, it is critical that they avoid equipment downtime.  On-time delivery and reduced lead time of aftermarket parts and services allow customers to reduce downtime and are therefore key measures of customer service, and the Company believes they are fundamental drivers of aftermarket customer demand.  The Companys on-time delivery percentage in the aftermarket, based on achieved promised delivery dates to customers, was 94% for the year 2004 and 93% for the first six months of 2005.  Lead times for deliveries were approximately the same in the first six months of 2005 as compared to the year 2004, although some suppliers are now increasing lead times for materials which may affect parts delivery lead times in the future.  The Company increased on-time deliveries and reduced lead times in recent years by focusing on the development of key shop floor metrics, improved communication between sales, manufacturing and shipping, daily or weekly meetings to resolve issues, changing of shipment methods and the hiring of an additional supervisory person dedicated to on-time delivery.  The information to accomplish much of these improvements is available from the Companys enterprise resource planning (ERP) system.  Productivity  Sales per full time equivalent employee is a measure of the Companys operational efficiency.  Sales per full time equivalent employee were $.3 million for the first six months of 2005 and $.2 million for the first six months of 2004.  The Company has experienced productivity increases in recent years, primarily due to the application of worldwide sales and inventory ERP systems and personnel upgrades which, collectively, allowed sales to grow with minimal changes in headcount.  Warranty Claims  Product quality is another key driver of customer satisfaction and, as a result, sales.  Management uses warranty claims as a percentage of total sales as one objective benchmark to evaluate product quality.  During the year 2004 and the first six months of 2005, warranty claims as a percentage of total sales were less than 1%.   17       Backlog  Backlog is a tool which allows management to forecast sales and production requirements.  Due to the high cost of some OEM products, backlog is subject to volatility, particularly over relatively short periods.  A portion of the Companys backlog is related to multi-year contracts that will generate revenue in future years.  The following table shows backlog at June 30, 2005 and December 31, 2004 as well as the portion of backlog which is or was expected to be recognized within twelve months of these dates:  June 30,
      2005
    
    December
      31,
      2004(Dollars
      in Thousands)Next
      12 months
    
    
    $
    324,367
    
    $
    231,455Total
    
    
    
    573,268
    
    
    436,317  The increase in the Companys backlog at June 30, 2005 is due to the improved market conditions in which the Company sells its products.  Inventory  Inventory is one of the Companys significant assets.  As of June 30, 2005, the Company had $147.5 million in inventory.  Inventory turned at a rate of approximately 2.9 times during the first six months of 2005 and approximately 3.0 times in the year 2004.  Inventory turns is calculated based on cost of sales and the average inventory balance during the prior twelve months.  The Company believes that it has appropriately recorded at the lower of cost or market any slow moving or obsolete inventory in its financial statements.  The factors that could reduce the carrying value of the Companys inventory include reduced demand for aftermarket parts due to decreased sales volumes attributable to new or improved technology or customers discontinuing the use of the Companys older model machines, which could render inventory obsolete or excess.  With the exception of
the normal inventory obsolescence provision recorded in the ordinary course of business, the Company does not anticipate recording any significant inventory impairments.  Results of Operations  Quarter And Six Months Ended June 30, 2005 Compared to Quarter And Six Months Ended June 30, 2004  Sales  Sales for the quarter and six months ended June 30, 2005 were $140.0 million and $245.6 million, respectively, compared with $117.0 million and $214.1 million for the quarter and six months ended June 30, 2004, respectively.  Sales of aftermarket parts and services for the second quarter of 2005 were $85.1 million, an increase of 2.3% from $83.2 million for the second quarter of 2004.  Sales of aftermarket parts and services for the six months ended June 30, 2005 were $162.9 million, an increase of 6.7% from $152.6 million for the six months ended June 30, 2004.  The increases in aftermarket sales in 2005 reflect the Companys initiatives and strategies to capture additional market share as well as continued strong commodity prices.  A significant portion of the increase in aftermarket sales for the six months ended June 30, 2005 was in the United States.
Machine sales for the second quarter of 2005 were $54.9 million,  18       an increase of 62.7% from $33.8 million for the second quarter of 2004.  Machine sales for the six months ended June 30, 2005 were $82.7 million, an increase of 34.5% from $61.4 million for the six months ended June 30, 2004.  The increase in machine sales for the three months ended June 30, 2005 was primarily due to the recognition of sales on two draglines that were sold in 2004.  The increase in machine sales for the six months ended June 30, 2005 was primarily due to the aforementioned draglines as well as increased electric mining shovel sales.  Approximately $1.7 million and $3.8 million of the increases in sales for the quarter and six months ended June 30, 2005, respectively, was attributable to a weakening United States dollar, which primarily impacted aftermarket sales (see "Foreign Currency Fluctuations" below).  Gross Profit  Gross profit for the second quarter of 2005 was $31.0 million or 22.1% of sales compared with $24.8 million or 21.2% of sales for the second quarter of 2004.  Gross profit for the six months ended June 30, 2005 was $60.0 million or 24.4% compared with $44.4 million or 20.8% for the six months ended June 30, 2004.  The increase in gross profit was primarily due to an increased sales volume and higher gross margins on both machines and aftermarket sales.  Gross profit for the six months ended June 30, 2005 and 2004 was reduced by $2.5 million of additional depreciation expense as a result of the purchase price allocation to plant and equipment in connection with acquisitions involving the Company.  Approximately $.4 million and $.8 million of the increase in gross profit for the quarter and six months ended June 30, 2005, respectively, was attributable to a weakening United
States dollar, which primarily impacted aftermarket sales (see "Foreign Currency Fluctuations" below).  Selling, General and Administrative Expenses  Selling, general and administrative expenses for the quarter ended June 30, 2005 were $12.1 million or 8.7% of sales compared with $14.2 million or 12.1% of sales for the quarter ended June 30, 2004.  Selling, general and administrative expenses for the six months ended June 30, 2005 were $24.4 million or 10.0% of sales compared to $28.3 million or 13.2% of sales for the six months ended June 30, 2004.  Selling, general and administrative expenses for the quarter and six months ended June 30, 2005 included $45,000 and $90,000, respectively, related to non-cash stock-based employee compensation compared to $3.3 million and $7.4 million for the quarter and six months ended June 30, 2004.  Selling expenses for the quarter and six months ended June 30, 2005 increased by $1.2 million and $2.4 million, respectively, from 2004 primarily due to increased sales efforts and higher
foreign costs as a result of the weakened U.S. dollar, but remained relatively constant as a percentage of sales.  Foreign currency transaction gains for the quarter and six months ended June 30, 2005 were $.5 million and $1.3 million, respectively, compared with gains of $.2 million and $.8 million for the quarter and six months ended June 30, 2004, respectively.  Research and Development Expenses  Research and development expenses for the quarter and six months ended June 30, 2005 were $1.5 million and $2.8 million, respectively, compared with $1.3 million and $2.6 million for the quarter and six months ended June 30, 2004, respectively.   19       Amortization of Intangible Assets  Amortization of intangible assets, consisting primarily of engineering drawings, bill of material listings and software, was $.5 million and $.9 million for the quarter and six months ended June 30, 2005, respectively, compared with $.4 million and $.8 million for the quarter and six months ended June 30, 2004, respectively.  Operating Earnings  Operating earnings for the second quarter of 2005 were $16.9 million or 12.1% of sales, compared with $8.9 million or 7.6% of sales for the second quarter of 2004.  Operating earnings for the six months ended June 30, 2005 were $31.9 million or 13.0% of sales, compared with $12.7 million or 5.9% of sales for the six months ended June 30, 2004.  Operating earnings for the quarter and six months ended June 30, 2005 increased from 2004 due to increased gross profit resulting from an increased sales volume and higher gross margins on both machines and aftermarket sales.  Operating earnings for the quarter and six months ended June 30, 2004 were reduced by $3.3 million and $7.4 million, respectively, of non-cash stock compensation expense.  Approximately $.3 million and $.4 million of the increase in operating earnings for the quarter and six months ended June 30, 2005,
respectively, was attributable to a weakening United States dollar (see "Foreign Currency Fluctuations" below).  Interest Expense  Interest expense for the quarter and six months ended June 30, 2005 was $1.1 million and $2.4 million, respectively, compared with $4.2 million and $8.3 million for the quarter and six months ended June 30, 2004, respectively.  The decrease in interest expense in 2005 was due to the refinancing of the Companys capital structure in connection with its initial public offering which was completed on July 28, 2004.  Other Expense - Net  Other expense - net was $.1 million of expense for the quarter and six months ended June 30, 2005, respectively, compared with $.4 million and $.7 million of expense for the quarter and six months ended June 30, 2004, respectively.  Debt issuance cost amortization was $.2 million and $.5 million for the quarter and six months ended June 30, 2005 compared with $.4 million and $.8 million for the quarter and six months ended June 30, 2004, respectively.  These amounts include costs related to the Companys credit facilities (see "Liquidity and Capital Resources - Financing Cash Flows" below).  Income Taxes  Income tax expense for the quarter and six months ended June 30, 2005 was $5.5 million and $10.0 million, respectively, compared with $1.7 million and $3.1 million for the quarter and six months ended June 30, 2004, respectively.  Income tax expense for the quarter and six months ended June 30, 2004 consisted primarily of foreign taxes at applicable statutory rates since taxable U.S. income was offset by federal net operating loss carryforwards.  In 2005, U.S. taxable income exceeded available net operating loss carryforwards and income tax expense was recorded.  At June 30, 2005, the Company had approximately $14.3 million of federal net operating loss carryforwards.  20        Foreign Currency Fluctuations  The following table summarizes the approximate effect of changes in foreign currency exchange rates on the Companys sales, gross profit and operating earnings for the quarter and six months ended June 30, 2005 and 2004, in each case compared to the same quarter in the prior year:  Quarters Ended
June 30,
     
     Six Months Ended
June 30,2005
     
     2004
     
     2005
     
     2004(Dollars in Thousands)Increase in sales
     
     
     $1,738
        
     $2,825
        
     $3,803
        
     $7,132Increase in gross profit
     426
        
     550
        
     835
        
     1,320Increase in operating earnings
     257
        
     328
        
     408
        
     354  EBITDA  Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the quarter and six months ended June 30, 2005 was $20.3 million and $38.6 million, respectively, compared with $12.0 million and $19.1 million for the quarter and six months ended June 30, 2004, respectively.  EBITDA is presented (i) because the Company uses EBITDA to measure its liquidity and financial performance and (ii) because the Company believes EBITDA is frequently used by securities analysts, investors and other interested parties in evaluating the performance and enterprise value of companies in general, and in evaluating the liquidity of companies with significant debt service obligations and their ability to service their indebtedness.  The EBITDA calculation is not an alternative to operating earnings under accounting principles generally accepted in the United States of America
(GAAP) as an indicator of operating performance or of cash flows as a measure of liquidity.  The following table reconciles Net Earnings as shown in the Consolidated Condensed Statements of Operations to EBITDA and reconciles EBITDA to Net Cash Provided by (Used in) Operating Activities as shown in the Consolidated Condensed Statements of Cash Flows:  21         Quarters Ended
June 30,
     
     Six Months Ended
June 30,2005
     
     2004
     
     2005
     
     2004(Dollars in Thousands)Net earnings
     
     
     $10,224
        
     $2,629
        
     $19,349
        
     $614Interest income
     (149
        )
     (49
        )
     (358
        )
     (114
        )Interest expense
     1,110
        
     4,166
        
     2,362
        
     8,291Income taxes
     5,517
        
     1,722
        
     10,035
        
     3,102Depreciation
     2,920
        
     2,742
        
     5,784
        
     5,503Amortization (1)
     691
        
     834
        
     1,379
        
     1,656EBITDA (2)
     20,313
        
     12,044
        
     38,551
        
     19,052Changes in assets and liabilities
     (23,271
        )
     10,651
        
     (21,022
        )
     6,382Non-cash stock compensation expense (3)
     45
        
     3,293
        
     90
        
     7,441(Gain) loss on sale of fixed assets
     (129
        )
     5
        
     153
        
     13Interest income
     149
        
     49
        
     358
        
     114Interest expense
     (1,110
        )
     (4,166
        )
     (2,362
        )
     (8,291
        )Income tax expense
     (5,517
        )
     (1,722
        )
     (10,035
        )
     (3,102
        )Net cash provided by (used in) operating activities
     $(9,520
        )
     $20,154
        
     $5,733
        
     $21,609Net cash used in investing activities
     $(5,388
        )
     $(1,573
        )
     $(7,989
        )
     $(2,274
        )Net cash used in financing activities
     $(12,213
        )
     $(16,159
        )
     $(11,397
        )
     $(18,563
        )  (1)
        Includes amortization of intangible assets and debt issuance costs. (2)
        EBITDA for the quarter and six months ended June 30, 2004 is reduced by expenses pursuant to a management services agreement with American Industrial Partners (AIP) as well as fees paid to AIP or its affiliates and advisors for services performed for the Company outside the scope of the management services agreement of $.6 million and $1.2 million, respectively.  The management services agreement was terminated in July 2004.  EBITDA is also reduced by restructuring charges (severance) for the quarters ended June 30, 2005 and 2004 and six months ended June 30, 2005 and 2004 of $60,000 and $116,000, $73,000 and $170,000, respectively. (3)
        Non-cash stock compensation expense for the quarter and six months ended June 30, 2004 represents the charge recorded related to stock options issued prior to the completion of the Companys initial public offering on July 28, 2004.  At the time of the initial public offering, the plan required certain modifications to the determination of fair market value for these previously issued options.  In accordance with EITF Issue No. 87-23, no further compensation expense was recorded subsequent to July 28, 2004 related to stock options issued under this plan prior to the Companys initial public offering.  Under existing accounting standards, provision for compensation expense related to the 24,000 shares of restricted stock issued under the Bucyrus International, Inc. 2004 Equity Incentive Plan in September 2004 will be approximately $.2
million annually over the four years subsequent to the date of issuance.   22       Liquidity and Capital Resources  Cash Requirements  During the remainder of 2005, the Company anticipates strong cash flows from operations due to continued strength in aftermarket parts sales as well as increased demand for new machines.  In expanding markets, customers are generally contractually obligated to make progress payments under purchase contracts for machine orders.  As a result, the Company does not anticipate significant outside financing requirements to fund production of these machines and does not believe that new machine sales will have a negative long-term effect on its liquidity.  If additional borrowings are necessary during the remainder of 2005, the Company believes it has sufficient capacity under its new revolving credit facility (see Financing Cash Flows" below).  The following table summarizes the Companys contractual obligations with respect to long-term debt and short-term obligations as of June 30, 2005:  Total
     
     1 Year
Or Less
     
     2-3 Years
     
     4-5 Years
     
     ThereafterLong-term debt
     
     
     $89,792
        
     $411
        
     $472
        
     $86,921
        
     $1,988Short-termobligations
     1,250
        
     1,250
        
     
        
     
        
     $91,042
        
     $1,661
        
     $472
        
     $86,921
        
     $1,988  There have been no material changes to the contractual obligations with respect to purchase obligations and operating leases and rental and service agreements as presented in the Companys 2004 Annual Report to Shareholders.  The Companys capital expenditures for the six months ended June 30, 2005 were $8.0 million compared with $2.3 million for the six months ended June 30, 2004. Included in capital expenditures for the six months ended June 30, 2005 was $2.2 million related to the new manufacturing facility in Milwaukee.  The Company expects a continued increase in capital expenditures during the remainder of 2005 as it increases manufacturing capacity and upgrades and replaces manufacturing equipment to support increased sales activity.  The Company believes cash flows from operating activities will be sufficient to fund capital expenditures in 2005.  At June 30, 2005, there were $26.9 million of standby letters of credit outstanding under all Company bank facilities.  The Company believes that cash flows from operations will be sufficient to fund its cash requirements for the next twelve months.  The Company intends to pay quarterly cash dividends of $0.575 per share (equal to $.23 per year).  A quarterly cash dividend of $1.2 million was declared on April 14, 2005 and paid on May 16, 2005.   23       Sources and Uses of Cash  While the Company had $6.8 million of cash and cash equivalents as of June 30, 2005, this cash is located at various foreign subsidiaries and is used for working capital purposes.  Cash receipts in the United States are applied against the Companys revolving credit facility.  Operating Cash Flows  During the first six months of 2005, the Company generated cash from operating activities of $5.7 million compared to $21.6 million in the first six months of 2004.  The decrease in cash flows from operating activities was driven primarily by increased working capital requirements.  Receivables  The Company recognizes revenues on its machine orders using the percentage-of-completion method. Accordingly, accounts receivable are generated when revenue is recognized, which can be before the funds are collected or in some cases, before the customer is billed.  As of June 30, 2005, the Company had $106.5 million of receivables compared to $90.8 million of receivables at December 31, 2004.  Receivables at June 30, 2005 and December 31, 2004 included $36.9 million and $31.4 million, respectively, of revenues from long-term contracts which were not billable at these dates.  Liabilities to Customers on Uncompleted Contracts and Warranties  Customers generally make down payments at the time of the order for a new machine as well as progress payments throughout the manufacturing process.  In accordance with SOP No. 81-1, these payments are recorded as Liabilities to Customers on Uncompleted Contracts and Warranties.  The increase of $3.7 million from December 31, 2004 to June 30, 2005 was due to the receipt of customer payments on certain long-term machine contracts for which the related revenue has yet to be recognized.  Financing Cash Flows  On May 27, 2005, the Company entered into a new credit agreement with GMAC Commercial Finance LLC as lead lender.  The new credit agreement provides for a five year $120.0 million revolving credit facility that may, at the Companys request and with the lenders approval, be increased to $150.0 million.  The new credit agreement provides that interest on borrowed amounts would initially be set at either the prime rate plus .25% or LIBOR plus 1.25%, with quarterly adjustments to interest rates beginning after six months.  Proceeds from this new revolving credit facility were used to pay in full the previously outstanding senior secured term loan.  Borrowings under the revolving credit facility are subject to a borrowing base formula based on the value of eligible receivables and inventory.  At June 30, 2005, the Company had $85.9 million of borrowings under its
revolving credit facility at a weighted average interest rate of 4.9%.  The amount available for borrowings under the revolving credit facility at June 30, 2005 was $12.9 million.  24        The new credit agreement contains covenants limiting the discretion of management with respect to key business matters and places significant restrictions on, among other things, the Companys ability to incur additional indebtedness, create liens or other encumbrances, make certain payments or investments, loans and guarantees, and sell or otherwise dispose of assets and merge or consolidate with another entity.  All of the Companys domestic assets and the receivables and inventory of the Companys Canadian subsidiary are pledged as collateral under the revolving credit facility.  In addition, the outstanding capital stock of the Companys domestic subsidiaries as well as the majority of the capital stock of the Companys foreign subsidiaries are pledged as collateral.  The Company is also required to maintain compliance with certain financial
covenants, including a leverage ratio (as defined). The Company was in compliance with all applicable covenants as of June 30, 2005.  Critical Accounting Policies and Estimates  See Critical Accounting Policies and Estimates discussed in the Management's Discussion and Analysis section of the Companys 2004 Annual Report to Shareholders.  There have been no material changes to these policies.   25        BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  The Companys market risk is impacted by changes in interest rates and foreign currency exchange rates.  Interest Rates  The Companys interest rate exposure relates primarily to floating rate debt obligations in the United States.  The Company manages its borrowings under its credit facilities through the selection of LIBOR-based borrowings or prime-rate based borrowings.  If market conditions warrant, interest rate swaps may be used to adjust interest rate exposures, although none have been used to date.  At June 30, 2005, a sensitivity analysis was performed for the Companys floating rate debt obligations.  Based on this sensitivity analysis, the Company has determined that a 10% change in the Companys weighted average interest rate at June 30, 2005 would have the effect of changing the Companys interest expense on an annual basis by approximately $400,000.  Foreign Currency  The Company sells new machines, including those sold directly to foreign customers, and most of its aftermarket parts in United States dollars.  A limited amount of aftermarket parts sales are denominated in the local currencies of Australia, Canada, Chile, South Africa, Brazil and the United Kingdom which subjects the Company to foreign currency risk. Aftermarket sales and a portion of the labor costs associated with such activities are denominated or paid in local currencies.  As a result, a relatively strong United States dollar could decrease the United States dollar equivalent of the Companys sales without a corresponding decrease of the United States dollar value of certain related expenses.  The Company utilizes some foreign currency derivatives to mitigate foreign exchange risk.  Currency controls, devaluations, trade restrictions and other disruptions in the currency convertibility and in the market for currency exchange could limit the Companys ability to timely convert sales earned abroad into United States dollars, which could adversely affect the Companys ability to service its United States dollar indebtedness, fund its United States dollar costs and finance capital expenditures and pay dividends on its common stock.  Based on the Companys derivative instruments outstanding at June 30, 2005, a 10% change in foreign currency exchange rates would not have a material effect on the Companys financial position, results of operations or cash flows.   26        BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES ITEM 4 - CONTROLS AND PROCEDURES  As of the end of the period covered by this Report, an evaluation was carried out under the supervision and with the participation of the Companys management, including its President and Chief Executive Officer and its Chief Financial Officer, Controller and Secretary, of the effectiveness of the design and operation of the Companys disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")).  Based upon their evaluation of these disclosure controls and procedures, the President and Chief Executive Officer and the Chief Financial Officer, Controller and Secretary concluded that the disclosure controls and procedures were effective as of the end of the quarter ended June 30, 2005 to ensure that material information relating to the Company, including its consolidated subsidiaries, was made known to them by
others within those entities, particularly during the period in which this Report was being prepared.  There were no changes in the Companys internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2005 that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.  It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system are met.  In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.  Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.   27        FORWARD-LOOKING STATEMENTS  This report contains 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 adversely affect the Companys actual results and performance include, without limitation:    customers production capacity, stockpiles, and production and consumption rates of copper, coal, iron, oil and other ores and minerals;    the cash flows of customers;    consolidation among customers and suppliers;    work stoppages at customers, suppliers or providers of transportation;    the timing, severity and duration of customer and industry buying cycles;    unforeseen patent, tax, product, environmental, employee health or benefit, or  contractual liabilities that affect the Company;    litigation;    nonrecurring restructuring and other special charges incurred by the Company;    changes in accounting or tax rules or regulations that affect the Company;    changes in the relative values of currencies;    the Companys leverage and debt service obligations;    the Companys success in recruiting and retaining key managers and employees;    labor costs and labor relations; and    the Companys plant capacity.  The review of important factors above is not exhaustive, and should be read in conjunction with the other cautionary statements included in this report and in the Companys 2004 Annual Report to Shareholders and Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 21, 2005. All forward looking statements attributable to the Company are expressly qualified in their entirety by the foregoing cautionary statements. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise.   28        PART II OTHER INFORMATION  Item 1.
        Legal Proceedings.  Not applicable.  Item 2.
        Unregistered Sales of Equity Securities and Use of Proceeds.  Not applicable.  Item 3.
        Defaults Upon Senior Securities.  Not applicable.  Item 4.
        Submission of Matters to a Vote of Security Holders.  At the Companys annual meeting of shareholders on April 14, 2005, the three continuing directors who were managements nominees for re-election were elected to the Companys Board of Directors for terms expiring at the 2008 annual meeting of shareholders.  The directors were re-elected with the following votes:  Directors Name
    
    
    For
    
    WithheldRonald
      A Crutcher
    
    
    
    18,288,127
    
    
    92,498Robert W.
      Korthals
    
    
    
    18,167,937
    
    
    212,688Gene E. Little
    
    
    
    18,206,352
    
    
    174,273  At the meeting, shareholders also ratified the selection of Deloitte & Touche LLP to serve as independent registered public accountants of the Company for fiscal 2005, by the following vote:  For:
    
    18,266,690Against:
    
    88,285Abstained:
    
    25,650  Item
        5.
    Other
        Information.  Not applicable.  Item 6.
        Exhibits.  See Exhibit Index on last page of this report.   29          SIGNATURES   Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.   BUCYRUS INTERNATIONAL, INC.(Registrant)    Date
    August
        12, 2005
    /s/Timothy
        W. SullivanTimothy
        W. Sullivan
        President and Chief xecutive Officer    Date
    August
        12, 2005
    /s/Craig
        R. MackusCraig
        R. MackusChief Financial Officer, Controller and SecretaryPrincipal Accounting Officer    30       BUCYRUS INTERNATIONAL, INC. EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2005  Exhibit Number
        Description  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, Controller 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.                  El-1